Help Prevent Self-Employmnet Tax on CRP Rents

Until recently those landlords collecting CRP rents and social security were not subject to self-employment tax -- regardless of whether there were actively farming or just renting the ground out through the CRP program.

However, in June there was a ruling in the Morehouse Tax Court case that which states that the receipt of CRP payments by a non-farmer are subject to self-employment taxes.
According to CliftonLarsonAllen Partner and Farm CPA Today Blogger Paul Neiffer under the ruling of this case, it appears that almost any farmland enrolled in CRP will be subject to SE tax (at least in the Eighth Circuit) unless the case gets appealed and overruled which will likely take a couple of years to resolve. Neiffer encourages farmers to
Neiffer: “We had posted on our blog about a week ago the fact that if a farmer was interested or a non-farmer were interested in helping the appeal process go though that maybe they could send $100 or $200 towards the appeal effort. We definitely want to see it appealed because if this law stands as it is now our American farmers that are sort of landlords are going to be subject to a lot of extra self-employment tax.”
If you are interested in learning more go to Neiffer’s blog, Farm CPA Today.com.