No, only the person selling crops they produced on the farmland is eligible to claim the credit. One of the requirements to claim the credit is that qualified production activities income is generated from property that is assessed as either manufacturing or agricultural property. A person that receives rental income is not eligible to claim the credit.

Exception: A landowner that receives crops as part of a crop-sharing arrangement for use of their land is considered to have farm income when the crops are sold, if the arrangement with the tenant provides that the landowner will materially participate in the production or management of production of the crops on the land, and the landowner materially participates in such arrangement. The sale of such crops are production gross receipts for purposes of computing and claiming the credit. See IRS Publication 225, Farmer's Tax Guide for more information about whether income from crop shares are considered rental income or farm income.

For Taxable Years Beginning on or After January 1, 2019:

Yes. 2019 Wisconsin Act 167 amended the definition of production gross receipts to include: the sum of gross receipts from the lease, rental, license, sale, exchange, or other disposition of qualified production property and insurance proceeds received as a result of the destruction of, or damage to, crops to the extent the proceeds are included in federal adjusted gross income for the taxable year.

For Taxable Years Beginning Before January 1, 2019:

No. Production gross receipts means gross receipts from the lease, rental, license, sale, exchange, or other disposition of qualified production property. Price protection crop insurance is meant to guarantee a certain level of crop revenue when crop prices and/or yields are low. Because the revenue was not directly received from the lease, rental, license, sale, exchange, or other disposition of tangible personal property that is produced, grown, or extracted in whole or in part by the claimant on or from property assessed as agricultural property under sec. 70.32(2)(a)4., Wis. Stats., the income is not considered qualified production activities income and may not be used to compute the credit.

For Taxable Years Beginning on or After January 1, 2019:

Yes. 2019 Wisconsin Act 167 amended the definition of production gross receipts to include: the sum of gross receipts from the lease, rental, license, sale, exchange, or other disposition of qualified production property and insurance proceeds received as a result of the destruction of, or damage to, crops to the extent the proceeds are included in federal adjusted gross income for the taxable year.

For Taxable Years Beginning Before January 1, 2019:

No. Production gross receipts means gross receipts from the lease, rental, license, sale, exchange, or other disposition of qualified production property. Crop insurance proceeds that prevent plant or other damage are not qualified production gross receipts so they may not be used in the computation of the credit. A qualified production gross receipt is a receipt from the lease, rental, license, sale, exchange, or other disposition of tangible personal property that is produced, grown, or extracted in whole or in part by the claimant on or from property assessed as agricultural property under sec. 70.32(2)(a)4., Wis. Stats. Crop insurance proceeds are meant to compensate for the loss of crops due to severe weather conditions or other abnormalities, and because the proceeds were not from producing, growing, or extracting tangible personal property, they are not considered qualified production activities income.

No. A federal farm subsidy payment that is meant to compensate a farmer when the price of a commodity drops below a predetermined level is not considered production gross receipts for purposes of computing the Wisconsin agriculture credit. In order to be included as production gross receipts, income must be received from the lease, rental, license, sale, exchange, or other disposition of tangible personal property, or insurance proceeds received as a result of the destruction of, or damage to, crops to the extent the proceeds are included in federal adjusted gross income for the taxable year, that is produced, grown, or extracted in whole or in part by the claimant on or from property assessed as agricultural property under sec. 70.32(2)(a)4., Wis. Stats. The farm subsidy payments are meant to compensate when the prices for milk fall below a certain level; they are not from sale of the product itself, which is a requirement in the calculation of the credit.

No. Commodity credit corporation loans would not be considered production gross receipts because they are not derived from the sale of tangible personal property. The agriculture credit requires a claimant to produce gross receipts from the lease, rental, license, sale, exchange, or other disposition of tangible personal property, or insurance proceeds received as a result of the destruction of, or damage to, crops to the extent the proceeds are included in federal adjusted gross income for the taxable year, that is produced, grown, or extracted in whole or in part by the claimant on or from property assessed as agricultural property under sec. 70.32(2)(a)4., Wis. Stats. The loans are being used as collateral until the crops are actually sold, but do not reflect the actual proceeds from the sale of the crops. The taxpayer is only allowed to compute the production gross receipts based on the actual amounts received from the sale of crops.

If the income allocated to the farmer from a cooperative on federal Form 1099 is derived from production gross receipts in Wisconsin (the lease, rental, license, sale, exchange, or other disposition of qualified production property, or insurance proceeds received as a result of the destruction of, or damage to, crops to the extent the proceeds are included in federal adjusted gross income for the taxable year), that portion of the income can be included on line 1 of Wisconsin Schedule ​​​​MA-A as production gross receipts. If only part of the income from federal Form 1099-PATR is related to producing, growing, or extracting tangible personal property on agricultural property, an allocation will need to be made.

No. Each claimant would fill out their own Schedule MA-A and claim the credit based on the respective receipts and expenses. The married couple are operating separate businesses and reporting the net profit/loss on separate federal Schedules F, so each is entitled to the credit based on their own business operations.

If the animals were raised by the claimant on property that is assessed as agricultural property under sec. 70.32(2)(a)4., Wis. Stats., then the sale of the animals would qualify as production gross receipts. If the claimant does not raise the animal, then the claimant has not sold qualified production property. The department considers an animal "raised" if it was held by the claimant for more than one year. However, certain exceptions may apply. For example, a feedlot that is used for controlled feeding of animals to fatten them up prior to sale to a slaughterhouse is "agriculture use" property under sec. 70.32(2)(a)4., Wis. Stats., even if the animals are held for less than one year.

Additionally, if the sale of the animal is included in production gross receipts, then the basis of the animal is considered part of the cost of goods sold and should be entered on line 2 of Schedule ​MA-A.

Yes. The property factor uses an average value of the original cost of property determined at the beginning and end of the tax year. Note that depreciation expense is not used in computing the average value of property.

Custom labor is not included on line 1 or 7 because the custom labor is not a production gross receipt (i.e., receipts from the lease, sale, exchange, or disposition of tangible personal property produced, grown, or extracted on property assessed as agricultural in Wisconsin).

The amount the farmer paid you for baling hay is a direct expense if it is associated with the production gross receipts of that person. The sale of hay or the sale of livestock would be production gross receipts if the tangible personal property is produced, grown, or extracted on property assessed as agriculture in Wisconsin.

No. These are expenses of the farming operation, not gross receipts.

Yes. Line 8 includes all gross income from whatever source.

Crop damage insurance is an indirect expense of the farming operation and a portion of it is used in computing the credit because the indirect expenses are multiplied by the production gross receipts factor.

None of the Wisconsin income tax credits are included in production gross receipts because the income is not from the sale of tangible personal property. However, a Wisconsin income tax credit reduces the amount of direct or indirect expense in computing the MA credit if 1)the credit is a recovery of a deduction previously taken on a federal tax return, and 2)the credit is a reduction to the current year's deduction on the federal income tax return.