If you farm through an LLC or an S corporation, you could be eligible for a bigger USDA payment limit. There’s a Sept. 15 deadline in the mix — as well as some confusion around exactly what must happen before that date.
What the Sept. 15 Deadline Actually Means
Technically, Sept. 15 is the deadline to make any changes to the structure of your farm — not necessarily a USDA paperwork deadline. The final rule in the One Big Beautiful Bill Act uses your organizational structure as of Sept, 15, 2026, to set your entity type for the 2026 program year, and FSA can take the Form CCC-902E after that. However, not every county office is interpreting the rule that way. Some are telling producers the paperwork has to be in by Sept. 15, but others are treating Sept. 15 as the structure date.
What should you do? Call and ask your county office one question: Do you want my updated 902E in hand by Sept. 15, or will you accept it after? Get the answer from the person who will actually key it in.
This matters most for larger operations set up as a limited liability company (LLC), an S corporation, a limited partnership (LP), a limited liability partnership (LLP) or anything else with a letter in the name. The new per-owner stacking is worth real money, and a misunderstanding at the counter can push your entire 2026 election into 2027.
The Dollars At Stake: How the Payment Limit Rules Work
In regard to the details of the payment-limit changes, on June 2 the Commodity Credit Corporation published its final rule stating with the 2026 program year, LLCs and S corporations are no longer stuck with one limit for the whole entity. They now get treated the way general partnerships and joint ventures always have, which is one limit for each owner who is actively engaged in farming.
The rule calls these qualified pass-through entities, which is any entity taxed as a partnership, S corporations and LLCs that haven’t elected corporate treatment. A QPTE’s limit equals the program limit times the number of actively engaged owners. For a multi-owner family operation, that can multiply your cap several times over.
Two numbers matter:
- OBBBA raised the ARC/PLC limit and indexed it to inflation — roughly $160,000 for 2025 and a tentative $164,000 for 2026. Plan on those, not the $125,000 the rule’s own examples still use.
- A four-member family LLC that used to share a single $164,000 cap now reaches $656,000. On a farm with enough base to generate $700,000 in ARC/PLC, that’s nearly half a million dollars you stop leaving on the table.
A related fix: an owner’s salary or guaranteed payment now counts toward being actively engaged. Previously, a salaried daughter running the place was disregarded and the entity stayed at one limit. Now her paid management counts and a two-owner S Corp doubles to $328,000.
There’s also relief on the $900,000 income cap. Normally, average adjusted gross income over $900,000 shuts you out. OBBBA waives that cap for disaster and conservation programs and the NRCS conservation programs — if at least 75% of your average gross income comes from farming, ranching or silviculture. But note the cap is on adjusted gross income and the 75% test runs on gross income before expenses. An overwhelmingly agricultural operation usually clears 75% easily, even in a thin year. It does not reach ARC or PLC, though, because those stay capped.
Again, call your FSA office to determine exactly what they’re expecting on Sept. 15. Don’t leave your tax adviser out of the conversation either. For example, if your farm is structured as a regular corporation that still has one payment limit, you might need to consider switching to an S corporation if you are bumping up against the limits.
Contact your county FSA office and determine what documentation it wants and when it wants it. Then talk with your tax adviser about whether your existing structure makes sense under the new rules.
Watch this recent AgriTalk segment to hear more from Neiffer: