PA Resource Enhancement and Protection Act (PA REAP)
August 3, 2021 |
Attention, PA farmers and business owners. Each year the state budget designates dollars through a state tax credit to encourage farmers to participate in conservation practices. Common eligible conservation expenses include no-till planters, composting equipment, manure storage, waterway and barnyard improvements, stream bank fencing, and riparian buffers.
The state awards tax credits equal to 50% of most expenses, making these projects more affordable. The tax credit carries forward 15 years to offset future tax liabilities. Farmers can opt to sell the credits through a broker to receive cash in hand.
Nutrient management plans, E&S plans, and conservation plans are required. The costs to have these plans created is eligible for REAP credit equal to 75% of the cost of the plans.
Applications can be submitted in August 2021, and credits are awarded on a first-come, first-serve basis. Credits are generally exhausted by the end of the year. In order to secure tax credits for 2021, we recommend applying by November 1, 2021.
Think You May Have Missed Out on Past Credits?
If you purchased a new no-till planter in the past three years and did not apply for REAP credit, contact us today and we can apply for the tax credit for 2021. If you constructed a new livestock barn with manure storage in the past 3 years and did not obtain the credit, we can help!
New for 2021: The REAP program was modified to limit applications for projects that were completed in the last three years. Previously the program allowed a farmer to apply for credits within the specified lifespan of the project, including 10 years for structural components, 7 years for new equipment, and 3 years for used equipment.
Interested in Purchasing Tax Credits?
Businesses can purchase REAP credits or sponsor a project. These options have different rules and benefits. Please contact a Simon Lever team member for more information.
Simon Lever has helped many farmers obtain credits, sell/transfer credits, or find a sponsor for the credits. Our goal is to maximize your success.
Our Agribusiness Advisors
Kurt Groff kgroff@simonlever.com
Jenny Shutter jshutter@simonlever.com
Adam Wenger awenger@simonlever.com
Laura Longacre llongacre@simonlever.com
