Farmers whose land is agriculturally zoned, or who have signed agreements, are eligible for tax credits or refunds against their state income tax. The income tax credit is based on household income and property tax. The household income includes: the net farm income; any nonfarm income and any other miscellaneous sources of income; nonfarm business losses; and farm depreciation of $25,000. Property taxes up to $6,000 are eligible for relief and the maximum credit is $4,200. Basically, the higher the property tax, the higher the tax credit, and the lower the income, the higher the credit.
Households whose incomes are too high for the formula credit are eligible for a minimum credit of 10 percent of property taxes. The maximum amount of property taxes eligible for the 10 percent credit is $6,000. A person with a tax bill of $6,000 or more would be eligible for a $600 tax credit.
The level of tax credits also depends on whether the county has an agricultural plan, exclusive agricultural zoning, or both.