By Shelby Shank
Field Editor

Provisions in the Tax Cuts and Jobs Act are set to expire in 2025 and could result in farmers, ranchers and business owners potentially paying more of their inheritance to the federal government.

The comprehensive tax cut package was enacted in 2017, and it lowered taxes for most individuals and businesses, including farms and ranches.

“The Tax Cuts and Jobs Act is extremely important for farmers, ranchers and small businesses,” Laramie Adams, Texas Farm Bureau associate director of Government Affairs, said. “The tax deductions and estate tax exemption provide much-needed relief to many farmers and ranchers. Without these provisions, taxes will increase, and that’s even tougher news for those in agriculture who are facing inflation and rising input costs.”

Currently, Americans can claim an estate tax exemption of up to $11 million per person or $22 million per couple (indexed for inflation).

Those levels will expire in 2025 and exemptions will return to $5.5 million per person and $11 million per couple.

A recent Economic Research Service report highlighted the potential impact of the act’s expiration.

Farmers and ranchers could face over $9 billion in tax increase in 2026 due to higher income tax and estate tax liability, according to the American Farm Bureau Federation.

Farmers and ranchers are encouraged to engage with their elected officials and advocate for the reauthorization of these provisions.

“Engaging with your elected officials is key. Sharing your personal stories and explaining the consequences of these provisions expiring can have a significant impact,” Adams said. “The Tax Cuts and Jobs Act has been instrumental in providing tax relief for farmers and ranchers. It’s important to stay informed, engage with your elected officials and advocate for policies that support the agricultural community.”

More than 160 lawmakers have co-sponsored the Death Tax Repeal Act, HR 7035, to permanently repeal the estate tax, also known as the death tax.

The bill was introduced last August.

The legislation has been referred to the U.S. House Committee on Ways and Means.