Growers were originally paid 75% of the estimated damage amount for 2020 and 2021. This final payment represents an additional 3.5% for a final top-off of 78.5%.
However, many farmers will not receive additional payments if they have already hit the payment limit of $125,000 which is a combination of Phase 1 and Phase 2 for each of those years. Let’s look at an example:
Betty received a 2020 ERP Phase 1 payment of $100,000. She also received a Phase 2 payment of $21,375. The $100,000 payment equates to a total calculation of $133,333. 3.5% of this number is $4,667, however, she is limited to a final payment of $3,625.
This payment is for damage in 2020 and 2021, therefore, it cannot be deferred to 2025 and will need to be reported as income when received in 2024.
