A Summary of OBBB Tax Provisions Affecting Midwestern Farmers

Andrew Keller

No 391416, ARPC Brief from North Dakota State University

Abstract: The One Big Beautiful Bill (OBBB), signed in July 2025, reshapes the farm tax landscape primarily by preventing the scheduled 2026 sunset of major 2017 Tax Cuts and Jobs Act provisions and by adding targeted new benefits for producers. This post summarizes the law’s effects across three practical domains for Midwestern farm operations. First, it locks in lower individual income tax rates and the higher standard deduction, avoiding an automatic tax increase for most farm families, while also strengthening and permanently extending the Child Tax Credit and adding a temporary senior deduction for 2025–28. Second, it improves farm business investment incentives by making the 20% qualified business income deduction permanent, restoring 100% bonus depreciation, and expanding Section 179 expensing, alongside other provisions that affect interest limits, SALT, and clean fuel incentives. Third, it supports intergenerational succession by permanently increasing the estate and gift tax exemption to $15 million per person (indexed) and preserving stepped-up basis, helping most family farms transfer assets without federal estate tax exposure.

Keywords: Agribusiness; Agricultural and Food Policy; Agricultural Finance (search for similar items in EconPapers)
Date: 2025-07-21
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Persistent link: https://EconPapers.repec.org/RePEc:ags:arpcbr:391416

DOI: 10.22004/ag.econ.391416

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