Agriculture Tariff Relief Coupled with Federal Tax Incentives Can Strengthen Farmers’ Bottom Line

12.11.25

R&D Tax Credit Tax Updates

National Managing Director
Former Senior Counsel to the U.S. Senate Finance Committee

alliant is urging farmers to combine the recently announced $12 billion immediate bridge funding package with the R&D credit. The Trump administration this week announced a significant relief plan to support farmers affected by market challenges. These payments are intended to help farmers survive until next planting season and only apply to certain operations.

While the bridge payments are a one-time injection, the existing tax stimulus provision, also known as the R&D credit, has been established for decades and works as a sustained and reliable method of funding. This credit can provide cash refunds for the work most farmers do every day. Further, it was recently enhanced after the passage of the One Big Beautiful Bill, making it significantly more valuable.

alliant Chairman of Agriculture and Former U.S. Secretary of Agriculture Mike Johanns said, “This bridge funding will allow them to fight another day. It provides immediate stability for farmers as markets adjust,” Johanns said. “But there are existing federal tax benefits that every operation should be taking advantage of, such as the R&D credit. The large producers are already leveraging the benefit to insulate them from shifting markets, but it’s equally available to smaller operations where it can actually be more impactful.”

alliant Director of Agriculture and Former U.S. Senator Heidi Heitkamp added that innovation on the farm is one of agriculture’s greatest advantages:

“Farmers are constantly improving—whether it’s crop rotations, seed trials, feed blends or water efficiency,” Heitkamp said. “Many of those efforts qualify for federal tax incentives. It’s essential that producers take advantage of every dollar available to them so our farmers can stay competitive through economic uncertainty.”

Federal Tax Incentives

A significant portion of the nation’s 1.9 million farmers could potentially qualify for federal tax incentives. To date, alliant has helped agriculture clients receive over $900 million in these federal benefits by identifying qualifying activities for the R&D credit, which rewards on-farm innovation such as:

Testing new plant varieties and improving livestock genetics
Experimentation with new or different fertilizers
Development of new irrigation systems
Evaluation and implementation of new techniques to increase yields
Improvements in harvesting equipment, techniques or cycle times
Experimentation with new feeds or feeding techniques for livestock

One Big Beautiful Bill

The One Big Beautiful Bill substantially increased the stimulative effect of the R&D credit by allowing farmers to go back and amend their tax returns for prior years to receive significant refunds. These refunds may only be available until next July, so it is imperative for agribusinesses to make their claims as soon as possible.

Even operations that are claiming the credit should re-evaluate, as there could be a sizable increase in value.

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Dean Zerbe is alliant’s National Managing Director based in the firm’s Washington D.C. office. Prior to joining alliant, Mr. Zerbe was Senior Counsel and Tax Counsel to the U.S. Senate Committee on Finance. He worked closely with then-Chairman and current Ranking Member of the Finance Committee, Senator Charles Grassley (R-IA), on tax legislation.

Dean Zerbe

National Managing Director