The Wolf administration unveiled $10 million in tax credits for Pennsylvania farmers who pursue measures to improve soil and water quality on Friday.
Agriculture Secretary Russell Redding announced the credits, which are available through Pennsylvania’s nationally recognized Resource Enhancement and Protection Program (REAP), which was expanded under the 2019 Pennsylvania Farm Bill.
"Farmers are the original stewards of our land and water resources," Redding said. "REAP tax credits are just one element of our strategy to support their stewardship and grow a viable, sustainable Pennsylvania farm economy to feed our future."
According to the Department of Agriculture, REAP is a tax credit program for agricultural producers who implement best management practices or purchase equipment that reduces nutrient and sediment runoff, enhancing soil and improving the quality of Pennsylvania’s waterways.
REAP tax credits have been available to Pennsylvania farmers for 14 years, and those farmers can receive up to $250,000 in any seven-year period. Spouses filing jointly can also use REAP tax credits.
Commonly-approved projects for the credits include no-till planting and precision ag equipment, waste storage facilities, conservation plans, Nutrient Management Plans, and protecting animal heavy-use areas like barnyards.
Farms may receive REAP tax credits of 50% to 75% of the project’s eligible out-of-pocket costs. Farmers whose operation is in a watershed with an Environmental Protection Agency-mandated Total Maximum Daily Load can receive credits up to 90% of out-of-pocket costs for some projects.
The tax credits can be used in conjunction with other funding sources such as the Environmental Quality Incentive Program, the Chesapeake Bay Program or Conservation Excellence Grants to help install best management practices.
REAP applications are reviewed on a first-come, first-served basis, and baseline eligibility includes compliance with the PA Clean Streams Law and the Pennsylvania Nutrient and Odor Management Law.
Private investors are permitted to act as project sponsors by providing capital in exchange for tax credits. Any individual or business subject to taxation by Pennsylvania throughout personal income tax, corporate net income tax, the bank shares tax or others is eligible to participate in REAP.
Since 2007, REAP has awarded over $100 million to fund more than 5,500 projects. Improvements from these projects have kept more than five million pounds of nitrogen, 250,000 pounds of phosphorous and 250,000 pounds of sediment out of streams and rivers in the commonwealth, along with the waterways they feed.
Private investments in REAP have also contributed to these conservation projects, which in total awre worth nearly $250 million.
Interested farmers can find more information about REAP, along with the 2020-21 application packet and program guidelines, at agriculture.pa.gov.