During 2012, the drought in Missouri caused many livestock owners to reduce the size of their herds due to the lack of hay or pasture. Many farmers received a USDA disaster payment under the Livestock Indemnity Program payment in 2014 for the 2012 drought.
The payments were not received until 2014 due to waiting for funding under the new farm bill. Or farmers had livestock program insurance policies that paid out due to the drought.
There is still time to amend your 2014 tax returns if you received a livestock disaster or emergency payment. Missouri Senate Bill 641 became effective Aug. 28, 2016.
The bill allows for a deduction on the Missouri return for any income received by livestock producers who suffered a loss on or after Jan. 1, 2014 as a result of a disaster or emergency. The payment received was included in your federal taxable income and Missouri Senate Bill 641 is allowing you a deduction against your income for these payments.
Payments from the following sources qualify for the deduction under the Senate Bill: Livestock Forage Disaster Program; Livestock Indemnity Program; Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish; Emergency Conservation Program; Noninsured Crop Disaster Assistance Program; Pasture, Rangeland, Forage Pilot Insurance Program; Annual Forage Pilot Program; Livestock Risk Protection Insurance Plan; and Livestock Gross Margin Insurance Plan.
You can look at your 1099-G, report of payments to producers, to see if you were enrolled in any of the governmental payments listed above, and/or discuss with your insurance agent to see if you were enrolled in any of the insurance programs listed above.
If you timely filed your 2014 or 2015 tax return, you will need to amend the returns in order to obtain the Missouri deduction. You will need to amend the Missouri return and write on the top of the first page of the Missouri return “Ag Disaster.” You will also need to attach Form MO-AGDR along with a copy of the 1099 that indicates your agriculture payment.
For tax year 2016 and beyond, the deduction is claimed by putting the amount of the agriculture disaster relief payment on line 16 of the MO-A.
Under normal circumstances, the statute of limitations to amend a tax return is three years. Therefore, if you timely filed your 2014 tax return the statute of limitations could be getting ready to expire. It would expire either March 15, 2018 or April 15, 2018 depending on if it is an entity or an individual who received the payment.
Amended returns must be received by the state of Missouri prior to the statute of limitations expiring. Simply putting them in the mail by the deadline does not qualify. In order to ensure you don’t miss out on the deduction, review your information and determine if you are eligible to amend.
Amanda Schneider is a licensed CPA and an active farmer. Amanda lives with her son and her husband in Corder, Mo., and is a manager in the Marshall office of Wilson Toellner, CPA.