Pennsylvania Invites Farmers to Apply for $13M Tax Credits
Soil Water Management In Agriculture

Pennsylvania Invites Farmers to Apply for $13M Tax Credits

Agriculture Secretary Russell Redding announced today that Pennsylvania farmers are invited to apply for $13 million in tax credits to support their efforts in improving soil health and water quality. These tax credits are part of Pennsylvania’s innovative conservation financing program, Resource Enhancement and Protection (REAP).

REAP Program Details

REAP tax credits can be combined with other state funding, including the Agriculture Conservation Assistance Program and Conservation Excellence Grants, as well as federal funding through programs like the Environmental Quality Incentives Program. These combined resources will help pay for on-farm enhancements that protect the environment and boost farm sustainability.

The tax credits are aimed at agricultural producers who implement best management practices or purchase equipment to reduce nutrient and sediment runoff, enhance soil health, and improve the quality of Pennsylvania’s waterways.

Governor Shapiro’s Budget and Expanded Eligibility

Governor Shapiro’s 2023-24 budget funds a fifth year of increased funding and expanded eligibility for the REAP program under the PA Farm Bill. Farmers may receive up to $250,000 in seven years, and spouses filing jointly can use REAP Tax Credits.

Examples of funded projects include:

  • No-till planting and precision agriculture equipment
  • Waste storage facilities
  • Conservation plans
  • Nutrient Management Plans
  • Measures that limit runoff from high animal-traffic areas
  • Cover crops and stream buffers that prevent erosion

Farmers may receive REAP tax credits of 50 to 75 percent of a project’s eligible out-of-pocket costs. Those operating 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.

Private Investment and Sponsorship

Private investors may act as project sponsors by providing capital in exchange for tax credits. This allows farmers to receive funds quicker and increases lenders’ confidence. Any individual or business subject to taxation by Pennsylvania is eligible to participate in REAP.

Impact of REAP

Since its inception in 2007, REAP has awarded $147 million in tax credits for more than 8,500 projects. These improvements have kept over 6.3 million pounds of nitrogen, 310,000 pounds of phosphorus, and 295,000 tons of sediment out of Pennsylvania’s streams and rivers. Private investments in REAP have also contributed to conservation projects worth $400 million.

Photo by Foto Phanatic on Unsplash 

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