Author Archives: warrencountyag
Author: Jerry Pierce
On May 28th the Biden Administration released a general explanation of its proposed tax changes. This includes an explanation of proposed changes in the American Families Plan that would tax transfers of appreciated property by gift or upon death, tax capital income for high-income earners at ordinary rates, increase the top marginal income tax rate, and apply the 3.8-percent Medicare tax to all trade or business income of high-income taxpayers, including transfer of assets.
Transfers of appreciated property by gift or at death will be treated as “realization events” which require recognition of gain. That is, the transfer will be taxed like a sale. The gain is taxable to the one making the gift or to the estate of the one who dies (decedent). The proposal would apply to gifts and deaths beginning in 2022.
There would be no adjustment or step-up in basis to fair market value at death when calculating the transfer tax. The purpose is to tax the appreciation or gain in value of assets that have not been taxed before. Gain is calculated by subtracting the adjusted basis from fair market value at the time of gift or death as if the property were sold. Adjusted basis is the original cost plus improvements minus depreciation. See the article Proposed Gift and Estate Tax Changes by Laura Powers in last month’s Economic and Policy Update.
The transfer tax is not an estate tax, but a new tax on the unrealized gain at the time of death or gifting. Both transfer tax and estate/gift tax will apply to property passed by death or gifting.
Current state and Federal estate taxes continue to apply and would not be changed by the proposal. Basis in assets would continue to be automatically adjusted or “stepped-up” to fair market value at death before estate taxes are calculated. The transfer tax would be deductible on the decedent’s estate tax return.
Exclusions Under the Proposal
Property transferred by a decedent to a U.S. spouse or to charity would not be subject to the transfer tax, but it would not receive step-up in basis. The basis of the decedent would be gifted or “carried over” to the one receiving the property. Charitable deductions would not be valued at fair market value but at the decedent’s basis in the property.
There is a $1 million per person exclusion from recognition of gains on property transferred by gift or held at death. The exclusion is portable to a surviving spouse. Any portion not used by one spouse can be used by the surviving spouse, making the exclusion effectively up to $2 million per married couple.
The current $250,000 per person exclusion for gain on a principal residence still applies to all residences. The exclusion remains portable to the decedent’s surviving spouse, effectively making it $500,000 per couple.
Gains on tangible personal property such as household furnishings and personal effects (excluding collectibles) are exempt.
Farmer and spouse die in 2022. Fair market value of the estate is determined to be $5 million. Basis in assets totals $2 million. Gain is $3 million. Gain on the residence is under $500,000. After subtracting the couple’s $2 million personal exclusion the amount subject to transfer tax is $1 million.
Same circumstances except that the farmer and spouse gift the property in 2022. The amount subject to transfer tax is the same: $1 million.
Basis for the Person Receiving the Property
The recipient receives a step-up to fair market basis in property received by inheritance. In Example 1 the recipient basis in the property is $5 million.
The total basis of property acquired by gift would have two components. The recipient would receive the donor’s basis for the property covered by the $1 million per person exclusion. The amount of property not covered by the personal exclusion would receive a step-up to fair market basis. In other words, the amount of the gift that is taxable to the donor gets the stepped-up in basis for the recipient. The recipient basis in property gifted in Example 2 would be $3 million: fair market value in the amount taxed ($1 million) plus mom and dad’s original basis in the amount not covered by their personal exclusion ($2 million).
Payment of the Tax
The proposal does not provide instructions for tax calculations, but it does give some clues. The following example, based on the examples above, provides a rough estimate of the tax due on the transfer tax based on the information given in the proposal. In both examples above, the taxpayers are assumed to file as married filing jointly because 1) both spouses in Example 1 died in the same year or 2) spouses were assumed to be living at the time of the gift in Example 2. No other income is included in the calculations.
The first $1 million of the gift would be taxed at capital gains rates, resulting in about $163,170 in Federal tax, plus $38,000 in additional Medicare tax. The remaining $2 million would be subject to ordinary tax rates with the changes in top rate and bracket and the additional Medicare tax. The total tax due on the $3 million would be about $840,595.
Payment of the tax for certain family-owned and operated farms and businesses would not be due until the business is sold or ceases to be family-owned and operated. No definition of family has been given. The authors’ original definition of family is those related by lineal descent: from grandparent to parent to children.
The proposal provides for a 15-year fixed-rate payment plan for the tax on appreciated assets transferred at death, other than liquid assets. Family-owned and operated farms and businesses electing to defer payment do not qualify.
The Internal Revenue Service is authorized to require security when reasonable. That is, the IRS may take out a lien on the property to secure the tax-deferred or the 15-year tax payment.
Other Provisions that may Affect Estate Transfer
The top marginal individual ordinary income tax rate increases from 37 to 39.6 percent.
The income threshold for reaching the top income tax bracket is lowered. For example, the top bracket for married filing jointly would drop from the current $628,300 to $509,300. For those filing as single, the top bracket falls from $523,600 to $452,700.
Long-term capital gains and qualified dividends of taxpayers with adjusted gross income of more than $1 million would be taxed at ordinary income tax rates for the amount that exceeds $1 million. Current capital gains rates range from zero to 20 percent. This would include the tax on transfer of assets by death or gift. Effective April 28, 2021.
Apply the additional 3.8 percent Medicare tax to all trade or business income of high-income taxpayers with adjusted gross income of $400,000 or more, including transfer of assets.
Repeal the deferral of gain from like-kind exchanges (Section 1031) for amounts exceeding $500,000. Applies to exchanges completed in tax years beginning after December 31, 2021.
Effects on Kentucky Farms
Farm data from farms participating in the Kentucky Farm Business Management program were examined to identify balance sheets with basis in assets, especially basis in land. A total of 320 farms in the program were identified. Of those, 160 (50%) appear to have a taxable amount after the exclusion. That is, subtracting adjusted basis from fair market value listed on the balance sheet resulted in a gain greater than the $1 million personal exclusion for the owner or the $2 million exclusion for the owner and spouse. Fair market value averaged $8.4 million. The taxable amount ranged from $14,000 to nearly $28 million. The average amount subject to the transfer tax was about $3.08 million.
These are commercial-sized, family-operated Kentucky crop and livestock farms. The average farm operates 2,044 acres. The farmer owns 418 acres (20 percent) and rents the other 1,626. The average Schedule F Income reported was $65,514.
The typical Kentucky family farm uses a large portion of rented farmland. The average KFBM farm owns 27% of the land used for production and rents the other 73%. The transfer tax will apply to individual landlords as well. The family farming operation will be adversely affected if it is unable to retain use of this rented land because the transfer tax prompts its sale.
Some landlords are family members that are no longer actively involved in the farm. Depending on how broadly family-owned and family-operated are defined the family farm exclusion may not apply to these landowners at their deaths.
There are other specific provisions in the American Families Plan that will impact gift and estate transfers and will change or limit the way estate planning may be carried out. For more information see:
“Green Book” Details President’s Tax Reform Proposals by Kristine A. Tidgren
Wheat harvest and soybean planting is in full swing! So if you travel roadways in an agricultural area, please be mindful that farmers often need to move equipment from one field to another, but sometimes those transitions require maneuvering large machinery down or across public roads. With more than 78,000 miles of public roads and 77,000 farms found in the Commonwealth, the opportunity for on-the-road encounters with farm equipment is quite realistic for many drivers.
It is completely legal for farm machinery to drive on Kentucky roadways, but when these slow-moving farm vehicles enter areas normally traversed by fast-moving cars and trucks, accidents sometimes occur. A vehicle traveling at highway speeds can cover hundreds of yards in just a matter of seconds and, especially at this time of year, unexpectedly come bumper-to-bumper with a large piece of farm equipment moving down the road at a much slower pace.
Every year there are farm vehicle collisions and The state police labeled the majority of those accidents the result of “inattention” – further proof that increased caution during harvest/planting season is needed to prevent tragedy.
In an effort to help drivers avoid accidents with slow-moving farm equipment this spring, Kentucky Farm Bureau offers the following suggestions for both motorists and farmers. While each roadway encounter is unique, a general sense of awareness and caution goes a long way in keeping everyone safe and preventing tragedy.
Tips for motorists:
- Slow down and pay attention to the road. Radios, cell phones and even passengers can lead to distracted drivers and slower reaction times. Focus on the traffic in front of the vehicle and stay within the posted speed limits, especially when traveling through areas where agriculture is prominent.
- Don’t assume the farmer knows you are there. While most farmers check frequently for vehicles approaching from behind them, their focus must remain on the road ahead. Drive far enough behind farm equipment to ensure farmers can see the vehicle in their mirrors. Also remember that farm machinery is very loud and may prevent the operator from hearing another vehicle’s approach.
- Keep your distance when following farm equipment. The triangular slow-moving vehicle emblem displayed on the back of farm equipment signifies that the machinery will not be traveling at high speeds and maneuverability is limited. Stay back and don’t tailgate. Slow-Moving Vehicle (SMV) signs are orange or red triangular signs that are placed on the back of equipment. This is your warning to slow down. Did you know it takes just five seconds for a car traveling 55 miles per hour to close a distance the size of a football field on a tractor or combine? Stay back and stay alert!
If farm equipment pulls to the right side of the road, it does not necessarily mean it is making room for other vehicles to pass. It is also possible that the farmer is slowing down and drifting right to gain extra room for a wide left turn.
- Use extreme caution when passing. If you cannot clearly see what lies ahead of both your vehicle and the equipment you intend to get ahead of, do not pass. Never pass farm equipment when approaching a hill or curve, and do not attempt to pass when within 100 yards of an intersection, bridge, railroad crossing or tunnel.
- Exhibit patience and slow down as soon as you spot a piece of farm equipment. Those tractors don’t want to be on the road any more than you want them to be. You are not the only one eager to get the farm equipment off the road and out of the way. Farmers must move their machinery carefully along roadways and have lower maximum speeds by which they can travel. When traveling behind these slow-moving vehicles, patiently wait for the operator to find an appropriate time to let you pass. Don’t assume this can be done at any time. The farmer must survey the shoulder of the road for an area that is not soft, wet or steep and can support the weight of the equipment without causing it to tip.
Tips for farmers:
- Make sure the slow-moving vehicle sign is visible. This emblem is used to alert others of the equipment’s speed and maneuverability capabilities, but doesn’t help if it is not visible. Mount it as high and as far left as possible. Keep the sign clean and replace it if it is no longer reflective.
- Never post a slow-moving vehicle sign on a mailbox or fence post. Misuse of the slow-moving vehicle emblem can confuse motorists and eventually dull their sensitivity to the need to slow down when seeing one on machinery traveling down the road. Slow-moving vehicle signs should only be posted on appropriate equipment.
- Keep flashing lights on. Use flashing lights on equipment to draw attention to your slow speed.
- Stay to the right. Keep farm equipment as far to the right edge of the road as safely possible, but stay on the road. Driving with equipment half on and half off the road might encourage a motorist to attempt passing before it is safe.
- Make intentions to turn obvious. Collisions between farm equipment and other vehicles on the road commonly occur when a slow-moving vehicle is attempting to turn. Use turn signals or the appropriate hand signal to indicate turns. If the operator is using flashing lights, switch those off when approaching a turn so that the trailing vehicles know more clearly where the equipment is headed.
- Avoid encouraging a motorist to pass. While it might seem courteous to wave someone ahead of a slow-moving piece of equipment, the driver of the trailing vehicle must ultimately determine when he or she can safely pass.
- When it is safe, pull over to allow traffic to pass. The bulky frames and slow speeds of farm equipment often causes backups in traffic. As shoulder conditions allow, find a place to safely pull over and allow trailing vehicles to pass.
Working together and remembering these safety tips will help everyone get home safely!
Source: Phil Craft, Kentucky State Beekeepers Association
Bees are an important part of agriculture, because they provide the pollination required to produce many crops. Beekeeping not only helps ensure that your crops get pollinated, but it can be a very rewarding experience, not to mention producing some very tasty honey. The Kentucky State Beekeepers Association has many upcoming educational programs to help you learn more about beekeeping and improve the health of your hives.
With funding from Kentucky State University, Phil Craft is offering an online series called Intermediate Beekeeping. Craft is a retired Kentucky state apiarist and former beekeeping specialist for the Kentucky Department of Agriculture.
This series is designed to help beekeepers better manage their honeybee colonies. The program consists of eight live virtual classes and a Q&A session. Sessions occur on various Tuesday nights throughout 2021 at 7 p.m. ET.
Upcoming sessions include:
June 1: Controlling varroa
June 22: Mid-summer hive management, honey dearth issues, robbing precautions, waxing moths and varroa summer treatment
July 6: Removing honey from the hive, processing the honey and selling it in Kentucky
July 27: Developing and following a varroa management plan
Aug. 24: Fall hive management, helping your bees prepare for winter
Sept. 21: Other IPM techniques to control varroa mites
Oct. 12: Phil Craft and other guest panelists TBA
To participate in the series, you must be a member of the Kentucky State Beekeepers Association. The cost to join is $15 per year, and you do not have to reside in Kentucky to be a member of the organization.
More information about these educational programs of the Kentucky State Beekeepers Association is available online at https://bit.ly/2QoJ4qE. More information on ways bees can improve your agricultural operation is available at the Warren County Office of the University of Kentucky Cooperative Extension Service.
Educational programs of the Kentucky Cooperative Extension Service serve all people regardless of economic or social status and will not discriminate on the basis of race, color, ethnic origin, national origin, creed, religion, political belief, sex, sexual orientation, gender identity, gender expression, pregnancy, marital status, genetic information, age, veteran status, or physical or mental disability.
By: Will Snell and Kenny Burdine
On March 24th, U.S. Ag Secretary Tom Vilsack introduced USDA’s Pandemic Assistance for Producers
that will be distributing more than $12 billion to assist agricultural producers and other
agricultural businesses impacted by the Coronavirus. As a review, Congress passed an additional
COVID-19 stimulus package (Consolidated Appropriations Act) last December providing supplementary
funding for crop and livestock producers who had received financial assistance from the first two
rounds of Coronavirus Food Assistance Program (CFAP) payments (i.e., CFAP 1 and CFAP 2). New
programs were also included to compensate contract growers and producers who had to depopulate
animals who were not eligible for the first two CFAP payments. On Jan. 15, 2021 the outgoing Trump
administration announced that it would be moving forward with programs for selected provisions of
the December 2020 COVID-19 relief bill, but upon entering office, the Biden administration
immediately announced they would be reviewing these payments and programs before issuing
guidelines. Following the review, the announcement on March 24th outlined USDA’s plan to
distribute these funds and introduce new programs which included the following:
• Reopen Coronavirus Food Assistance Program 2 (CFAP 2) for at least 60 days beginning
on April 5, 2021 in an attempt to identify eligible producers (focusing on socially disadvantaged
producers) who did not apply for CFAP 2 and for producers who want to modify their CFAP 2
• Corn, soybean, wheat, sorghum, hemp, alfalfa hay, and other row crops (click here
for the entire list) along with certain fruit, vegetable and other specialty crops (click here for
the entire list) will be eligible for an additional $20 per acre payment. Payments will be based on
2020 acres and for producers who submitted an accepted CFAP 2 application. Eligible row crop
producers do not need to submit a new CFAP 2 application to receive the latest round of payments.
• Cattle producers will be receiving an increase in CFAP 1 payment rates based on the
number of cattle in inventory between April 16, 2020, to May 14, 2020 ($1.1 billion). Cattle
producers with approved CFAP 1 applications do not need to reapply as they will automatically
receive these payments. The additional payment rates are:
Eligible Commodity Payment Rate
Feeder Cattle: Less than 600 Pounds $7.00/head Feeder Cattle: 600 Pounds or More $25.50/head Slaughter Cattle: Fed Cattle $63.00/head
Slaughter Cattle: Mature Cattle $14.75/head
All Other Cattle $17.25/head
• Contract livestock producers who had to depopulate their animals due to COVID-19
processing disruptions along with non-contract swine producers are eligible for funding under this
current round of payments, but USDA declared in their March 24ᵗʰ announcement, “payments for
contract growers are currently on hold and are likely to require modifications to the regulation as
part of a broader evaluation. FSA will continue to accept applications from interested contract
growers during this evaluation period.”
• Tobacco was eligible for CFAP 2, but similar to contract livestock producers, USDA
states that “payments for tobacco producers are currently on hold and are likely to require
modifications to the regulation as part of a broader evaluation. FSA will continue to accept
applications from interested contract growers during this evaluation period.”
• Additional funding to support Specialty Crop Block Grants, Farmers Opportunities
Training and Outreach Programs and the Local Agricultural Marketing Program ($500 Million).
• Additional funding (totaling $6 billion) to support new programs including
- Dairy farmers through the Dairy Donation Program
- Specialty crops; beginning farmers; and local, urban, and organic farms
- Costs for organic certification or to continue or add conservation activities
- Timber harvesting and hauling
- Personal Protective Equipment (PPE) and other protective measures for food/food workers
- Improving the resilience of the food supply chain
- Developing infrastructure to support donation and distribution of perishable commodities
- Reducing food waste
- Other possible expansion and corrections to the CFAP
HHW Collection will look a little bit different this year. We have modified the typical HHW event in order to serve the community and maintain COVID-19 protocols. We anticipate an increased number of participants this year after canceling the 2020 events due to COVID-19, and in order to maintain our level of service, we’ve added extra days to drop off selected items.
All month long citizens of Warren County households can drop batteries off for collection with our partners at Batteries Plus Bulbs on the Bypass, as well as pick up bags of paint hardener from Sherwin Williams at the Campbell Ln location.
In addition to that, we will have a limited drop off event at the Warren County Salt Barn on Thursday, March 18th and Friday, March 19th for ONLY batteries, electronic-waste, and paint. Any other items brought those two days will not be accepted.
On Saturday, March 20th we will have our typical HHW collection event for the collection of chemicals, pesticides, herbicides, gas cylinders, waste oil, light bulbs, etc.
In order to reduce long wait times, we are urging anyone who can drop off items during any of the other drop off periods to please do so.
Batteries Plus – Battery Drop Off
1150 US 31W Bypass
Bowling Green, KY 42101
Sherwin Williams, Campbell Ln – Paint Hardener Pick-Up
1689 Campbell Ln (Beside Five Guys)
Bowling Green, KY 42104
MARCH 18 & 19 – Lauren Avery Drive – 8AM-1PM
Electronics (no box TVs)
MARCH 20 – Lauren Avery Drive – 8AM-1PM
Electronics (no box TVs)
Land Shark – limited availability
Winter time is the perfect time to plan for the garden. Have you ever thought about plants that would be best for creating winter interest? These plants provide beautiful winter interest through exfoliating bark, unique foliage, and interesting berries, fruits, and even cones. In this episode, I am chatting with Dr. Win Dunwell, University of Kentucky Extension Horticulture Specialist who’s area of specialization is Nursery and Landscape. In our chat, he recommends several winter hardy plants that would make ideal candidates for providing winter interest in Kentucky’s garden and landscape. To listen to the full episode, stay with me right here on the Sunshine Gardening Podcast!
Plants with Winter Features:
Ilex species Winter Red Ilex verticillate- still one of the best
Aronia arbutifolia Brilliantissima
Hammamelis virginiana Sunglow
Pinus densiflora ‘Oculus Draconis’ / Dragon’s Eye Japanese red pine.
Remontant azaleas – Autumn Royalty
Tulip tree the left over seeds heads after seed has blown away look like little candelabras can be cut for table settings
Edgeworthia chrysantia zone 7 blooms over long period white creamy fragrant blooms on bare coarse stems.
Barks – lighting trunks
Persimmon bark dark blocks Host plant to Luna Moth
Sycamore London Plane tree cultivars look great in the winter back yard with trunk lighting
Leave perennials and grasses foliage and seed heads
Rhodea japonica green leaves and fruit (later than Jack in the pulpit or Green Dragon)
Hellebores I have SunShine Selections from Barry Glick’s Sunshine Farm and Gardens in West VA
Yucca Color Guard
Lycoris radiata foliage
Arbovitaes turn brown but Eastern Red Cedar cultivars like Greenpoint and Taylor along with Juniperus chinesis Trautman
Rose Hips Rosa rugosa, Carefree series, even Knockouts
Tips for hips:
Select roses with single, semi-double, or otherwise cupped-bloom form.
Stop pruning around September 1st.
Provide adequate irrigation with good drainage.
Encourage pollinators, like bees and other insects, to visit your roses by creating a naturalized edge or hedgerow.
Allow blossoms to fade and fall off of the plant naturally.
Uses for hips:
Clip single or clusters of rose hips and use in floral arrangements, wreaths, and holiday garland.
Wash, remove stems and coarsely chop for use in recipes to make jams, jellies, juices, and more. (Never use rose petals or hips sprayed with chemicals in any food product.)
Walk in the woods the leaves of spring flowering native orchids are showy on the brown leaves of the trees leaves especially the one with green top and purple underside to the leaf, Tipularia discolor, Cranefly orchid, Aplectrum hyemale, Putty-root. The leaves are more showy than the flower stalks. Once you have seen the leaves and flowers you will find them very common to the area where they occur.
Cornus mas and C. officinales bloom Feb-March
I hope that you enjoyed our discussion today over Creating Winter Interest in the Garden! To view the show notes for Episode 14, make sure to visit me on the blog at Warren County Agriculture.
A big thank you to Dr. Win Dunwell for being our guest!
Thanks for listening to the Sunshine Gardening Podcast!
Gardeners keep digging into gardening and remember to add a little sunshine!
It is safe to say that the lawn is no longer actively growing and is in for a long winter’s nap! Even though the lawn is considered dormant, it is important to practice caution with the winter lawn to avoid any setbacks for the upcoming season!
One major area of concern for winter lawns is the physical damage to it. Foot traffic and parking cars on winter lawns should be avoided to prevent further harm to the turf crowns. Leaves should also be removed and mulched to avoid any shading to the lawn.
Be aware and select de-icing materials that will not be harmful to the home landscape and turf. Rocks salts, calcium acetate, magnesium and potassium chloride, and urea are all harmful to turf, trees and shrubs! It is best to avoid these products, but if it can’t be helped, make sure to follow these basic guidelines:
- Shovel ice and snow away as soon as possible and continue to exercise this routine frequently throughout the winter. Smaller amounts of de-icing material are less likely to wreak havoc to turf and nearby landscape plants.
- Use deicers sparingly and never exceed the rate listed on the label.
- Urea containing deicers should be avoided. They are said to be ineffective at lower temperatures, and the runoff sends excess nitrogen into the water supply.
For more information, make sure to contact your local Extension Office in your area.
I have just the activity to help YOU chase away the winter blues! It involves taking 15 minutes of your time and watching the birds in your backyard. This activity my friends is called the Great Backyard Bird Count and it is happening this year on February 12-15th 2021. This activity is coordinated by the National Audubon Society and other organizations to serve as an instant snapshot of birdlife around the world. Since bird populations are constantly changing, the information you collect from the GBBC helps scientist understand how birds are affected by environmental changes. The data collected over the years can display how certain species’ of bird populations are increasing or decreasing. It can also show scientists what kinds of birds are inhabiting cities and suburbs compared to the natural areas.
In this episode, I am visiting with Dr. Matthew Springer, our Assistant Extension Professor of Wildlife Management with the University of Kentucky to get the scoop on what all is involved with this Great Backyard Bird Count!
Before we dive into today’s content, I have a favor to ask! If you enjoy listening to the Sunshine Gardening Podcasts, let me know with a REVIEW on Apple Podcasts!
Leaving a review is simple! Just pop open that purple app on your phone, share your biggest takeaway from an episode or what you would like to hear featured in the future! As always, thank you for listening and leaving a review about the podcast!
To listen to the full episode, make sure to see the audio link at the bottom of this blog post.
Remember to mark the calendar for the Great Backyard Bird Count happening February 12th until February 15th because it’s a fun and rewarding experience for people of all ages! It encourages gardeners to venture outside….or they can watch inside from their kitchen window!
If you would like to participate in other bird counts, Dr. Springer also mentioned about the Christmas Bird Count. To find out more about the Christmas Bird Count, please see the link listed here: https://www.audubon.org/conservation/science/christmas-bird-count
Also below, I have listed more information about the Merlin app and the eBird app that Dr. Springer mentioned in the talk today as well as where to get more information about the Great Backyard Bird Count!
Thanks for listening to the Sunshine Gardening Podcast!
Gardeners keep digging into gardening and remember to add a little sunshine!
How to participate in the Great Backyard Bird Count, https://www.birdcount.org/
The Economic Aid Act reauthorized the Small Business Administration (SBA) Paycheck Protection Program (PPP) through March 31 and made several modifications beneficial to farmers. It also authorizes second draw PPP loans.
Eligible expenses paid with PPP loans are deductible for tax purposes. And Economic Injury Disaster Loan (EIDL) advance grants are not taxable. See your tax preparer for details.
New rule for farmers only. Calculation of PPP loans is now based on gross income instead of net farm income. Gross income comes from Line 9 of Schedule F. The rule applies to sole proprietors and eligible self-employed farmers who report on Schedule F and were in business as of February 15, 2020.
This means farmers who did not qualify before may now qualify. It also means farmers who did not qualify for the maximum amount may request an increase in the original PPP loan if the loan has not been forgiven.
For those without employees the maximum is now $20,833. Those with employees add the higher of 2019 or 2020’s monthly payroll multiplied by 2.5.
Increase in existing loan amount. Borrowers may be able to request an increase in the original amount of the loan under certain circumstances if SBA has not remitted a forgiveness payment to the Lender (the loan is forgiven). This includes the new loan calculation for farmers and partnerships that did not include partner compensation in the application. Contact the lender that made the PPP loan to request the difference.
Other New Rules. Borrowers may use 2019 or 2020 for purposes of calculating their maximum loan amount. And they may now choose a covered period to pay or incur eligible expenses stretching from 8 weeks up to 24 weeks from the date loan proceeds are disbursed.
Eligible expenses for PPP loans have been added including payments for certain business software and services, cost for goods that are essential to the operation, and rent and business interest paid on obligations incurred before February 15, 2020. These eligible expenses apply retroactively to existing unforgiven PPP loans. PPP loans still require that at least 60 percent of the proceeds be used for payroll costs.
There is a simplified loan forgiveness application for PPP loans under $150,000.
New Loans (First Draw). A borrower who did not receive a PPP loan in 2020 may apply for a new loan based on the new rules. This applies to small businesses, self-employed and sole proprietors with or without employees, partnerships, and others in operation on February 15, 2020.
Second Draw Loans. Borrowers who received a PPP loan during 2020 may be eligible for a second PPP loan, even if the first loan has been forgiven. A qualifying borrower:
- has 300 or fewer employees,
- will have used all the original loan funds for authorized purposes before the new loan payments are dispersed, and
- can show gross receipts in any one quarter of 2020 was reduced by at least 25% compared to the same quarter in 2019.
A borrower in operation all four quarters of 2020 need only show that gross receipts for 2020 was reduced by at least 25% compared 2019. PPP forgiveness received in 2020 is not included in gross income.
This is based on SBA guidance through January 13, 2020. SBA intends to issue guidance on loan forgiveness and the loan review process later.
Author(s) Contact Information:
The recent announcements of the EU approval of RR2XtendFlex (RoundupReady 2 XtendFlex) soybean and EPA approval of three dicamba products has brought a clearer view of soybean weed control options available to Kentucky farmers in 2021. Prior to these two announcements the waters were murky with unknowns of if the flexibility of the RR2Xtendflex system would be available and if any dicamba formulations would be available to spray on any dicamba tolerant soybean acres. With the recent announcement came answers and clarification, but also prompted a few more questions and restrictions.
The most recent event to occur was the approval of Xtendimax (Bayer), Engenia (BASF), and Tavium (Syngenta) for applications to DT (dicamba tolerant) soybean. The three labels stayed largely unchanged from previous versions although crops outside of DT soybean and DT cotton have been removed from the labels. Restrictions of nozzles, tank mixes, sprayer speed, boom height, wind speed, and temperature inversions remain the same as previous labels. The restrictions that have changed are rate changes for Xtendimax burndowns, application cutoff date/growth stages, increases in buffer requirements, and the new requirements of a volatility reduction agent or buffer agent. Each change is described below:
- Xtendimax can only be applied at a rate of 22 fl oz/a per application, regardless of application timing. Previous labels allowed up to 44 fl oz/a Xtendimax for preplant/burndown applications, but that rate is no longer labeled.
- All three labels have a federal cutoff date of June 30th and no application can be made after that date. The Xtendimax label also indicates a cutoff soybean growth stage of R1, whereas the Tavium label has a soybean growth stage cutoff of V4. In both cases whichever occurs first (date or growth stage) takes precedent. The Engenia label does not include a cutoff growth stage, thus June 30th is the cutoff for this product.
- Down wind buffers have been extended from 110 ft in the previous labels to 240 ft in the new labels. Similar to previous labels these buffers can be included in directly adjacent roads, mowed grassy areas, corn fields, DT soybean fields, fields prepared for planting, and/or areas covered by a building. THIS BUFFER IS NOT INTENDED FOR PROTECITON OF DICAMBA SENSITIVE CROPS, THE LABELS REMAIN THE SAME IN THAT APPLICATIONS CANNOT BE MADE IF THE WIND IS BLOWING TOWARDS A SENSITIVE CROP SUCH AS NON-DT SOYBEAN, TOBACCO, VINEYARDS, AND TOMATOES.
- These buffers can be reduced with the use of hooded/shielded sprayers or other approved drift reduction technologies (DRT), as outlined on each label website.
- Areas in which endangered species are present may need a 310ft downwind buffer plus a 57 ft omnidirectional buffer. A list of these areas can be found on the Bulletins Live 2 website.
- The addition of a volatility reduction agent (VRA) or buffer agent is also required for all three labels in addition to drift reduction agents (DRA) that were required by previous labels. The list of approved VRA or buffers can be found on each respective products label website.
As in the past, dicamba specific training will still be required prior to application of Xtendimax, Engenia, and/or Tavium. This training will be offed by the registrants and will largely be available online.
The additional restrictions bring some clarification to past issues of the previous dicamba labels, but the additional restrictions certainly do not make their application easier. The extension of the downwind buffer to 240 ft may cause havoc as many Kentucky fields are surrounded by trees and thus the buffers will have to be placed within the production field being sprayed. While the distance in necessary to protect our natural resources and endangered species, 240ft can add up to numerous acres very quickly. In some cases, the area will be large enough for applicators/farmers to question the feasibility of applying the product to a given field.
The addition of the June 30th cutoff date places a hard deadline on applications, whereas past labels in which growth stages were used allowed many applications to continue to occur in the hot and humid months of July and August. Weather conditions in Kentucky in July and August simply are not ideal for dicamba applications in any crops, not to mention the numerous sensitive crops that are out during those time of year including tobacco. This cutoff date does however eliminate a lot of possible uses for double crop soybeans that likely will not be planted until late June and early July, so growers may need to seek an alternative herbicide programs for double crop soybean acres.
Despite the increase in restrictions of the new dicamba labels, the announcement of these labels comes on the heels of the approval of RoundupReady 2 XtendFlex soybean by the EU and thus full clearance for commercial production of those soybean varieties. The availability of RR2XtendFlex soybean varieties brings versatility to the Xtend platform that can be compared to its closest competitors. The XtendFlex soybean offers resistance to glyphosate and dicamba the same as RR2Xtend, but also offers glufosinate resistance. The addition of glufosinate offers postemergence flexibility for farmers who are dealing with glyphosate resistant broadleaves such as Palmer amaranth or waterhemp. The biggest fallacy, in my opinion, of the RR2Xtend soybean varieties was that farmers were largely married to dicamba for postemergence applications when dealing with waterhemp and Palmer amaranth, especially with the increasing incidence of PPO-resistance in these two weed species. In many cases a farmer/applicator was stuck in between a rock and a hard place when deciding when to apply dicamba under restrictive conditions and a rapidly growing weed. The addition of glufosinate offers a bit more flexibility and can allow a farmer to make an effective postemergence application of glufosinate if environmental conditions or surrounding crops do not allow for a timely application of dicamba. It must be said, though, that glufosinate is very capable of drifting the same as any other herbicide and thus if the wind is blowing at high speeds towards a sensitive crop no herbicide application, glufosinate, dicamba, or other should be applied.
As has been the message from University of Kentucky Weed Science in the past, the specific dicamba formulation one wants to apply and/or when to apply glufosinate matters less than the residual herbicide applied. Anybody choosing to raise RR2Xtendflex soybean who is dealing with Palmer amaranth or waterhemp must remain vigilant and apply robust preemergence herbicides. Research supported by the Kentucky Soybean Board has shown that even with the flexibility of the RR2XtendFlex soybean platform the use of a residual herbicide with 2 to 3 effective sites of action is more influential on end of season waterhemp and Palmer control than the choice or sequence of postemergence herbicides. This message applies to all herbicide tolerant soybean systems, and will continue to be the message for these two troublesome weeds.
Up to the recent two approvals of RR2XtendFlex soybean and Xtendimax, Engenia, and Tavium there was a lot of unknowns in weed control going into 2021. These recent approvals have brought a lot clarification to what farmers will have available for weed control in 2021 and their options are now fairly large which is great for soybean farmers.
AGR-256, Identification of Palmer Amaranth, Waterhemp, and Other Pigweed Species: http://www2.ca.uky.edu/agcomm/pubs/AGR/AGR256/AGR256.pdf
Author: Travis Legleiter, Plant and Soil Sciences