Adjusted Gross Income

The 2018 Farm Bill required the implementation of an average AGI limitation for payment eligibility, ($900,000). This limitation provision was updated by the Working Families Tax Cuts Act, also known as the One Big Beautiful Bill Act, and applies to most programs administered by the Farm Service Agency (FSA) and Natural Resource and Conservation Service (NRCS).

All persons and legal entities requesting certain program payments, either directly or indirectly, are subject to the AGI limitation provisions. Participants in programs subject to AGI rules must annually certify their eligibility to receive program benefits. IRS requires written consent from the individual or legal entity to provide USDA verification of compliance with AGI limitation provisions. The annual certification is made possible by completing the CCC-941 form, Average Adjusted Gross Income Certification and Consent to Disclosure of Tax Information. The AGI limitation takes into consideration the 3 taxable years preceding the immediate preceding tax year for which payments/benefits are being requested.

About the Program

Who must meet AGI for program year 2026 and future years?

• Individuals
• Entities, other than qualified pass-through entities, & members
• Members of qualified pass-through entities
• Indians and Native Americans represented by the BIA

How is AGI Computed for an Individual?

Average 3 years of income from Line 11 of the IRS 1040 form.

How is AGI Computed for an Entity?

Corporations filing a 1120 tax form

• Total Taxable Income (Line 30) + Charitable Contributions (Line 19)

Estate and Trusts filing a 1041 tax form

• Taxable Income (Line 23) + Charitable Contributions (Schedule A)

Tax Exempt or Charitable Organizations filing a 990-T tax form

• Unrelated Business Taxable Income (Line 11) minus Income from Non-Commercial Activity

Which Tax Years are used for Computing AGI?

Average of the 3 taxable years preceding the most immediately preceding complete taxable year.

• Example for 2026 program year, then average tax years 2022-2023-2024

What Programs Require AGI?

Link to chart in 6-PL

If for FSA or NRCS multi-year conservation contracts which AGI Form Do I File?

• If CRP Contract approved between (May 13, 2002 – Oct 1, 2008) CCC-526C
• If CRP Contract approved between (Oct 1, 2008 – Sept. 30, 2013) CCC-931C
• If CRP Contract approved between (Oct 1, 2013 – Sept. 30, 2014) No AGI Required
• If CRP Contract approved between (Oct 1, 2014 – Current) form CCC-941

Are there any exceptions to the AGI requirement?

Persons or legal entities participating in ELAP, LFP, LIP, NAP, TAP and conservation program payments or benefits under title II of the 2019, 2008, or 2002 Agricultural Acts or title XII of the 1985 Act may be exempt from the average AGI limitation if they derive 75% or more of their average gross income from farming, ranching, or silviculture activities. 

How do I request the exception?

Persons or legal entities, other than qualified pass-through entities, and member of qualified pass-through entities must file form CCC-943, 75% of Average Gross Income From Farming, Ranching, Or Forestry Certification, to request the exception. 

What is a Qualified Pass-Through Entity?

• A partnership as defined in subchapter K of chapter 1 of the Internal Revenue Code of 1986,
• An S-corporation as defined in section 1361 of that Code,
• A limited liability company that does not affirmatively elect to be treated as a corporation, and
• a joint venture or general partnership.