Pennsylvania farmers are invited by the Department of Agriculture to apply for $13 million in tax credits available to support their efforts to improve soil health and water quality. Tax credits through Pennsylvania’s conservation financing program, Resource Enhancement and Protection (REAP), can be combined with other state funding, including the Agriculture Conservation Assistance Program, and Conservation Excellence Grants, as well as federal funding through programs like the Environmental Quality Incentives Program to help pay for on-farm enhancements that protect the environment and boost farm sustainability.
“Pennsylvania farmers are investing heavily in cleaner water and productive soil to sustain us in the future,” said Agriculture Secretary Russell Redding. “REAP tax credits are just one of many ways Pennsylvania invests in our farmers’ efforts to grow a sustainable farm economy to feed our future.”
On August 7, the department will begin accepting applications for REAP tax credits from agricultural producers who implement best management practices or purchase equipment to reduce nutrient and sediment runoff, enhance soil health and improve the quality of Pennsylvania’s waterways.
Examples of funded projects include no-till planting and precision ag equipment, waste storage facilities, conservation plans, and Nutrient Management Plans. Measures that limit run-off from high animal-traffic areas, as well as cover crops and stream buffers that prevent erosion, keeping nutrients in the soil and out of the water, are also common practices eligible for tax credits.
Farmers may receive REAP tax credits of 50 to 75 percent of a project’s eligible out-of-pocket costs. Farmers whose operation is in a watershed with an EPA-mandated Total Maximum Daily Load (TMDL) can receive REAP tax credits of 90 percent of out-of-pocket costs for some projects.
REAP applications are reviewed on a first-come, first-served basis. Baseline eligibility includes compliance with the PA Clean Streams Law and the Pennsylvania Nutrient and Odor Management Law.
Private investors may act as project sponsors by providing capital in exchange for tax credits, which allows farmers to receive funds quicker and increases lenders’ confidence. Any individual or business subject to taxation by Pennsylvania through personal income tax, corporate net income tax, the bank shares tax or others is eligible to participate in REAP.
Since the program began in 2007, REAP has awarded $147 million in tax credits for more than 8,500 projects. Improvements from these projects have kept more than 6.3 million pounds of nitrogen, 310,000 pounds of phosphorus, and 295,000 tons of sediment out of Pennsylvania streams and rivers and the waterways they feed. Private investments in REAP have also contributed to the conservation projects, which in total are worth $400 million.
More information about REAP, including the 2023-24 application packet, program guidelines and sponsorship process, is available at agriculture.pa.gov. The deadline to submit applications is October 31, 2023. Please note: Funds may run out before the deadline.
This post adapted from a release by the Pennsylvania Department of Agriculture.
