Reporting farm income (only a CRP payment) in personal or business income

[staylor89]

All I receive is a CRP payment. I have no other income from the property.

[Cattlerancher · Accepted solution]

If you received a 1099-G for your CRP payment, enter it in the Farm Income and Expense section of TurboTax under Payments from Government, reported on a 1099-G. Then answer the important questions just below that in the Ag Programs interview, they may apply to you. Be sure to add any expenses such as real estate taxes, insurance, mileage or weed spray and fuel.

[staylor89]

Thanks I did it as you stated.

[Cattlerancher]

Glad to help~

[1040TAX]

So Do you also enter it in personal income section or just skip this?

[WendyN2]

No, you only enter it that once. Otherwise it will "double up" that amount.

[DisgruntledTAXpayer]

I have been doing this for years, seems like since 2023 I've had different issues each year.
As of right now, I do basically just as this post suggests, but when I finish wages and income, it just asks me who the money came from, what was it for "FARM land or FARM RENTAL" neither of which are the correct answer. then it literally just repeats the 2 questions over for eternity.....

The IRS specifically says not to setup this income as a Farm that makes profit and this as income yet TurboTax seems to keep saying to do this.
I spent 200 dollars last year to ask an expert and it just made matters worse and duplicated the income which I did not notice until starting my taxes for this last year...

Please help...

[DaveF1006]

 To clarify, do you operate a farm? If not, why was this CRP payment issued?

@DisgruntledTAXpayer 

[DisgruntledTAXpayer]

I do not own or operate a farm, I own land, that once was farm ground that was put into a crop restoration program which is basically the USDA planting trees for habitats on the land and preventing farming on the land/limiting other activities. 

Anyone can receive these payments if they sign up for the program with their USDA office you do not have to have any agricultural affiliation 

[DianeW777]

These  conservation reserve program payments (CRPs) are taxable and depending on your specific circumstances may have to be reported on Schedule F, even though you are not operating a farm at this time. See the information here and at the IRS link.

• Unless the taxpayer is receiving Social Security retirement or disability benefits, CRP “annual rental payments” are includible in net income from self-employment subject to self-employment tax. Note: Payments that are for the permanent retirement of cropland base and allotment history are not includible in net income from self-employment subject to self-employment tax because they are for the sale of section 1231 property or a capital asset. 
  • IRS CRP Payments and Self Employment Tax

If you are receiving social security or disability you can report the income as follows (assumes it is not permanent retirement of the property). 

Other Miscellaneous Income:

1. Sign into your TurboTax Online account
2. Go to Tax Home (left panel)  Wages and Income  section
3. Scroll to  Less Common Income > Select  Miscellaneous Income, 1099-A, 1099-C
4. Select Other reportable Income > Enter a description (----) and the amount

If you are not receiving social security or disability at this time report it on Schedule F using the link below.

• What is Schedule F: Profit or Loss from Farming
  1. Select Wages and Income > Scroll to Rentals, Royalties, and Farm > Select Farm Income and Farm Rental
  2. Select 'I received agricultural payments on a 1099-MISC or 1099-G for my farm rental' as the income type
  3. Continue to enter your 1099-G completing the appropriate boxes for your income
     • If the amount is greater than $400 there will be self employment tax calculated and included on your tax return.

Please update if you have additional questions and we will help.

@DisgruntledTAXpayer