On July 31, Agriculture Secretary Russell Redding announced the availability of $10 million in tax credits to farmers for measures to improve soil and water quality.  Tax credits are considered on a first come, first served basis and are usually oversubscribed.

Tax credits are available through Pennsylvania’s nationally recognized Resource Enhancement and Protection Program (REAP), which was expanded under the 2019 PA Farm Bill.

“Farmers are the original stewards of our land and water resources,” said Redding. “REAP tax credits are just one element of our strategy to support their stewardship and grow a viable, sustainable Pennsylvania farm economy to feed our future.”

REAP is a Pennsylvania tax credit program for agricultural producers who implement best management practices (BMP) or purchase equipment that reduces nutrient and sediment runoff, enhancing soil and improving the quality of Pennsylvania’s waterways.

This is the 14th year Pennsylvania farmers have been able to take advantage of REAP tax credits.

Farmers may receive up to $250,000 in any seven-year period, and spouses filing jointly can use REAP Tax Credits.

The most common projects approved are for no-till planting and precision ag equipment, waste storage facilities, conservation plans, Nutrient Management Plans, and protecting animal heavy-use areas, like barnyards.

Cover crops and riparian stream buffers are also common REAP-eligible practices. Farmers may receive REAP tax credits of 50 to 75 percent of the project’s eligible out-of-pocket cost.

Farmers whose operation is in a watershed with an EPA-mandated Total Maximum Daily Load (TMDL) can receive REAP tax credits of 90 percent of out-of-pocket costs for some projects.

Tax credits can be used in conjunction with other funding sources such as the Environmental Quality Incentive Program (EQIP), the Chesapeake Bay Program or Conservation Excellence Grants to help install BMPs.

REAP applications are reviewed on a first-come, first-served basis. Baseline eligibility includes compliance with the PA Clean Streams Law and the Pennsylvania Nutrient and Odor Management Law.

Private investors may act as project sponsors by providing capital in exchange for tax credits.

Any individual or business subject to taxation by Pennsylvania through personal income tax, corporate net income tax, the bank shares tax or others is eligible to participate in REAP.

Since the program began in 2007, REAP has awarded tax credits to more than 5,500 projects totaling over $100 million.

Improvements from these projects have kept more than 5 million pounds of nitrogen, 250,000 pounds of phosphorus, and 250,000 tons of sediment out of streams and rivers in Pennsylvania and the waterways they feed.

Private investments in REAP have also contributed to the conservation projects, which in total are worth nearly $250 million.

For all the details, visit Agriculture’s Resource Enhancement and Protection Program (REAP) webpage.  Questions should be directed to Joel Semke by sending email to: jsemke@pa.gov or call 717-705-4032.

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[Posted: July 31, 2020]

8/3/2020