Taxability of USDA Discrimination Financial Assistance Program Awards Resulting from the Inflation Reduction Act of 2022
The USDA DFAP awards authorized through IRA section 22007 are subject to income tax. Depending on the facts and circumstances of the individual, these awards may also be subject to self-employment tax. These awards are expected to be issued in the summer of 2024. Recipients of these awards are strongly advised to seek tax advice from a competent tax professional to help determine and manage the resulting tax consequences and how much money to set aside for the payment of taxes owed.
CAUTION: Recipients of DFAP awards are strongly encouraged to seek tax advice from competent advisors. Taxability is dependent on facts and circumstances of the individual cases, especially regarding the DFAP award being subject to self-employment tax.
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Taxability of USDA Discrimination Financial Assistance Program Awards Resulting from the Inflation Reduction Act of 2022
Taxability of USDA Discrimination Financial Assistance Program Awards Resulting from the Inflation Reduction Act of 2022 (Español)
Resources
The US Government Discrimination Financial Assistance Program page
USDA Farmers.gov - Taxes for Farmers and Ranchers
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More information and resources will be added as they become available.
CAUTION: Recipients of DFAP awards are strongly encouraged to seek tax advice from competent advisors. Taxability is dependent on facts and circumstances of the individual cases, especially regarding the DFAP award being subject to self-employment tax.
This information is intended for educational purposes only. You are encouraged to seek the advice of your tax or legal advisor, or other authoritative sources, regarding the application of these general tax principles to your individual circumstances. Pursuant to Treasury Department (IRS) Circular 230 Regulations, any federal tax advice contained here is not intended or written to be used, and may not be used, for the purpose of avoiding tax-related penalties or promoting, marketing or recommending to another party any tax-related matters addressed herein.