If land is zoned under Farmland Preservation, be sure the tax preparer uses the appropriate tax forms when claiming income tax credits.
Many landowners are still not using the correct forms, according to the Wisconsin Department of Agriculture, Trade and Consumer Protection, and that means they're not getting what they're entitled to receive.
The Department's analysis of recent data collected by the Wisconsin Department of Revenue shows that some Wisconsin landowners are under-claiming their Farmland Preservation tax credits at an average rate of about $3 per acre or almost $1 million total.
Farmers are eligible for Wisconsin income tax credits in exchange for keeping land in agricultural use and complying with state soil and water conservation requirements.
Preliminary data from the Department of Revenue indicates that more than 15,000 farmland owners collected over $19 million in farmland preservation tax credits in tax year 2011 on about 2.8 million acres of farmland.
"What the data from the Department of Revenue show is that a number of farmers aren't using the proper forms to claim their income tax credits and are claiming a lower tax credit than they should," said Keith Foye, land management section chief with the Department of Agriculture, Trade and Consumer Protection. "Essentially, they're leaving money on the table."
Foye estimated that the largest under-claim of tax credits occurred in Dane County, with more than 500 farmers under-claiming. Other counties with significant under-claims are Rock, Jefferson, Fond du Lac, Sheboygan, Iowa, Brown, Columbia, Manitowoc, and to a lesser degree in Walworth,
La Crosse, Outagamie, and Ozaukee counties.
It is estimated that more than 2,000 farmland owners statewide under-claimed their farmland preservation tax credits on over 300,000 acres of farmland.
Foye recommends the following when preparing 2012 tax information:
• Verify that land is located within a state-certified farmland preservation zoning district or that it is covered by a farmland preservation agreement.
• Those who own land in an area under certified farmland preservation zoning, or entered a farmland preservation agreement since July 1, 2009, should use the Schedule FC-A Form.
• If entered into a farmland preservation agreement prior to July 1, 2009, continue to use the Schedule FC form.
• Those who are unsure if their land is zoned or covered by an agreement should contact their town or county zoning office and their county land conservation office. It may be helpful to have the parcel numbers on the property tax bill.
Kris Modaff, DATCP farmland preservation program, is also available to answer questions on farmland preservation at 608-224-4633 or email email@example.com.
"If you believe you may not have claimed the appropriate amount of tax credits for tax year 2010 and 2011, you have up to four years after the initial claim was due to file an amended tax return," Foye said. "Be sure to use the correct tax schedule when filing the amended return."