The One Big Beautiful Bill changed eligibility requirements for farm programs, including ARC and PLC, which could increase payments for farmers, depending on their business entity. USDA is clarifying those eligibility requirements for farmers and qualified pass-through business entities.
The bill raised payment limits to $155,000, but new rules will allow for additional farm program payments, according to Richard Fordyce, USDA Undersecretary for Farm Production and Conservation.
“The bill does allow for members of business entities, such as partnerships, S-Corps, LLCs, joint ventures, general partnerships and the like, to qualify for their own unique payment limit if that were to be the case, say for an ARC or ARC county or PLC payment.
This will allow more farmer-owners to receive farm program payments, says Paul Neiffer, Farm CPA.
“LLCs or any entity taxed as a partnership or an S-corporation, those entities are going to be treated the same as a general partnership. If you had four equal owners, you get four payment limits instead of one payment limit,” he explains.
Navigating Business Structure Changes
As a result, Neiffer says some farms are changing their business structure.
“As long as you’re under the AGI limit, switching from a C-corp, which is still going to be stuck with one payment limit, to an S-Corp will get you multiple payment limits, if you have multiple owners. I’ve told people that if you’re a general partnership, you do not want to be switching over to an LLC yet until we have confirmation on the AGI limits,” he says.
Fordyce clarifies that FSA offices will be allowing entity changes after June 1, so farmers can be eligible for any benefits for the 2026 crop.
The definition of “actively engaged” in farming is also changing.
“They are going to still need to be actively engaged, but in some cases with these business entities, the payment limits to multiple members was limited. This changes that,” Fordyce says.
Base Acre Updates and Implementation Timeline
USDA is also updating 30 million base acres, which will be allocated based on 2019 to 2023 plantings, but only for new acres.
Neiffer says this could also enhance payments.
“Right now, we have about 245 million base acres. If we add in 30 million, that’s about a 12% increase, and remember, you’re paid based on base acres. You’re not paid based on planted acres.”
He reminds farmers the changes start with the 2026 crop with payments going out in the fall of 2027.
