What is an eligible farm employee?

There are many tax advantages and special deductions available to qualifying farmers. Examples in New York State alone include the Farm Workforce Retention Credit and the Farmer's School Property Tax Credit. There are many advantages on both the state and federal levels. In order to qualify for these credits, one must be considered an eligible farmer. This article will explain exactly what it means to be considered an eligible farm employee.

For purposes of the farm workforce retention credit, is a taxpayer subject to tax under Article 9-A or Article 22 that:

• is a corporation (including a New York S corporation), a sole proprietorship, a limited liability partnership (LLC), or a partnership

AND

• is also an eligible farmer.

What is an eligible farm employee?

According to the New York State Department of Tax and Finance...

An eligible farm employee is an individual who is employed for 500 or more hours per tax year by a farm employer in New York State, but excluding general executive officers of the farm employer. Workers who are part of the H-2A Temporary Agricultural Worker Program that meet the defenition of an eligible farm employee may be included in the computation of this credit.

Click here to get our New York Farmer's Tax Advantages Kit - a free resource to help farmers claim credits, protect their assets and put more money back in their pockets.

In the case of illness or disability

If an individual employed by a farm employer in New York State becomes unable to work due to a documented illness or disability, the farmer may combine the hours the individual was employed during the tax year with the hours of another individual hired to replace the ill or disabled individual in the same tax year when determining the 500 hour per year threshold for an eligible farm employee. The ill or disabled worker and the worker hired to replace him or her are considered one eligible farm employee for purposes of computing the credit.

Proof of illness or disability

In order to receive the credit, the farm employer must obtain proof of illness or disability for the ill or disabled worker in the form of a written statement from a physician or other health care provider licensed, certified or otherwise permitted by law to diagnose or treat the physicial or mental condition that led to the claimed illness or disability. The statement must include:

• the name and description of the farm employee's illness or disability;
• the physician's or health care provider's medical opinion that the illness or disability prevented the individual from working;
• to the best of the physician's or health care provider's knowledge, the specific time period during which the individual was unable to work due to their illness or disability; and
• the following certification signed by the physician or health care provider: "I hereby certify that, to the best of my knowledge and belief, the above representations are true, correct and complete."

Documentation

A farm employer must retain documentation of the hours worked (and proof of illness or disability, if applicable) for all eligible farm employees and to make it available to the New York State Department of Tax and Finance upon request.