If your farm operates as an LLC or an S corporation, USDA has spent years capping your commodity program payments at a single entity-level limit — no matter how many family members actually worked the operation. A four-member LLC received the same ceiling as a one-member LLC, while the general partnership next door collected a separate limit for every qualifying partner.
That asymmetry ended on June 2, 2026, when USDA's final rule implementing the One Big Beautiful Bill Act (OBBBA) took effect. Starting with the 2026 program year, LLCs, S corporations, and partnerships are all treated as qualified pass-through entities (QPTEs) that can claim one payment limit per actively engaged owner. With the ARC/PLC limit indexed to $164,000 per person for 2026, a four-member operation can now legally receive up to $656,000 — four times what the same entity could collect last year.
There's a catch, and it's a bookkeeping one: the entity structure, ownership percentages, and each owner's contributions must exist and be documented with your Farm Service Agency (FSA) office by September 15, 2026. What your records can prove — not what actually happened in the field — determines your payment ceiling.
What Actually Changed
Three separate OBBBA provisions matter here, and it's easy to conflate them.
The base limit went up, and now it indexes
The statutory ARC/PLC payment limit rose from $125,000 to $155,000 per person beginning with crop year 2025, with annual CPI-U inflation adjustments rounded to the nearest $1,000 and a floor so the limit never declines. In practice that means $160,000 for 2025 and $164,000 for 2026. Peanuts carry their own separate limit of the same size, as they always have.
Other program limits stayed put: $125,000 for LFP, $125,000/$300,000 for NAP catastrophic and buy-up coverage, $50,000 for CRP annual rental payments, $200,000 for CSP, $450,000 for EQIP, and $500,000 per disaster for ECP/EFRP. Marketing assistance loan gains and LDPs remain outside the payment-limitation system entirely.
Pass-through entities can now stack limits
Before this rule, only general partnerships and joint ventures multiplied the payment limit by the number of qualifying members. LLCs and S corporations — the structures most family farms actually use — were stuck with one limit per entity. The final rule amends 7 CFR Part 1400 to fix that: a QPTE's payment limitation equals the per-person limit times the number of qualifying owners.
For nested structures, FSA looks through up to four levels of ownership, bypassing embedded pass-throughs to count the actual individuals. An LLC owned by two partnerships with two active partners each supports four limits, not one.
Compensated work now counts as "actively engaged"
Every owner behind a stacked limit still has to pass the actively-engaged-in-farming test: a significant, at-risk contribution of capital, equipment, or land, plus personal labor or active personal management. The meaningful change is that paid labor and management now count. Previously, an S corporation shareholder drawing a $90,000 management salary saw that contribution disregarded entirely because it was compensated. Under the new rule, salary, wages, and guaranteed payments qualify like any other contribution — which is precisely why your payroll and compensation records just became payment-limit evidence.
The September 15 Snapshot
For the 2026 program year only, your entity structure, ownership percentages, and contribution arrangements as they exist on September 15, 2026 determine your payment limits and attribution. From 2027 onward, FSA reverts to the normal June 1 determination date.
That deadline is closer than it looks. Entities with six or more members face an automatic 60-day state-level review, which means a six-member LLC filing in mid-August may not be approved before the snapshot date. If you're restructuring — converting a single-member LLC, admitting a spouse or child as a member, formalizing an operating agreement — the paperwork needs to be finished, not started, weeks ahead of the deadline.
One caution worth taking seriously: FSA has long enforced a "scheme or device" doctrine that lets it deny payments and collapse an operation back to a single limit if it concludes an entity was created or reshuffled to evade payment limitations. The new rules reward structures that reflect reality — owners who genuinely contribute at-risk capital and real labor or management, with records to match. Paper-only members are the audit target, not the strategy.
The Bookkeeping This Now Demands
Every dollar of the expanded limit rides on documentation. Here's what your books need to show.
Per-owner contribution records
Each qualifying member needs contemporaneous evidence of both halves of the actively-engaged test:
- Capital, equipment, or land contributions — capital account balances, dated records of equipment titled or contributed to the entity, land deeds or leases. An owner's at-risk share should be visible in the books, not reconstructed in a letter after the fact.
- Labor and management — now that compensated work counts, payroll registers, W-2s, guaranteed-payment entries on the partnership books, and written management agreements are the evidence. If an owner's management contribution is informal, formalize it in the operating agreement and pay it through the entity so a record exists.
A plain-text ledger makes this auditable by construction. A contribution entry might look like:
2026-03-15 * "Capital contribution — Member B, tractor title transfer"
Assets:Equipment:Tractors 48,500.00 USD
Equity:Capital-Accounts:Member-B -48,500.00 USDClean member-level payment tracking
When FSA attributes a $164,000 limit to each of four members, your records should be able to show the same attribution. Track program receipts per member rather than as one undifferentiated revenue line:
2026-10-20 * "FSA PLC payment, attributed per operating agreement"
Assets:Checking:Operating 312,000.00 USD
Income:Farm:Program-Payments:Member-A -104,000.00 USD
Income:Farm:Program-Payments:Member-B -104,000.00 USD
Income:Farm:Program-Payments:Member-C -104,000.00 USDSeparate books per entity matter more than ever. If one checking account funds three entities, the four-level look-through stops being the hard part — proving which operation earned what becomes it.
AGI records at the member level
The $900,000 average-AGI cap still applies, but starting in 2026, QPTE members certify individually rather than the entity certifying as a whole. The relevant average for the 2026 program year covers tax years 2022, 2023, and 2024.
There's also a new waiver with real money behind it: if at least 75% of a producer's average gross income comes from farming, ranching, or silviculture, the AGI cap is waived entirely for LFP, LIP, ELAP, TAP, NAP, and Title II conservation benefits (CRP, EQIP, CSP, ACEP) received on or after October 1, 2024. Note two things. First, ARC and PLC are not covered — exceed $900,000 AGI and commodity payments are still off the table. Second, the waiver test uses gross income before expenses, while the standard cap uses adjusted gross income — a high-revenue, thin-margin farm can fail one test and pass the other.
The certification must be verified by a licensed attorney, CPA, or (newly) an enrolled agent, and joint filers need an attorney or CPA to sign a separate-return income breakdown. Your accountant can only verify what your books can split: farm versus non-farm income needs to be cleanly separated in your revenue accounts going back to 2022.
Farm income now includes more than you think
The definition of farm income broadened in ways that directly affect account coding. Direct-to-consumer and agritourism revenue — farm stands, U-pick, CSAs, farmers' markets, online sales of farm goods — now counts toward the 75% test. The old rule restricting equipment sale proceeds is gone, and equipment trade-in value now counts as farm income too.
If your farm stand sales currently land in a generic "Sales" account alongside custom-harvest income, split them. Come certification time, the 75% computation is a query over your chart of accounts — or an afternoon of archaeology through bank statements.
What to File, and When
The FSA paperwork hasn't changed names, but the stakes attached to it have:
- Farm operating plan (CCC-902) — updated to reflect your entity classification and each member's contributions. This is the document the September 15 snapshot freezes.
- Member information (CCC-901) — every direct and indirect owner's name and identification, through all four ownership levels.
- AGI certification (CCC-941) — now signed by each member individually.
- The new 75% waiver certification (CCC-943) — posted in June 2026, third-party verified as described above.
File early. County offices are processing every restructured farm in the region against the same deadline, and the six-plus-member review clock doesn't pause because your file is sitting in a queue.
The Bottom Line
The 2026 program year is the first where the legal structure your farm already has can support the payment limits your family's actual labor deserves — up to $164,000 per qualifying owner under ARC/PLC, with disaster and conservation programs riding on top of that. But the rule change only pays out to the extent your documentation is real: dated capital contributions, payroll or management-fee records for every member claimed as actively engaged, per-member payment attribution, and a clean farm/non-farm income split for the AGI tests.
Treat September 15 as a hard close. Whatever your books and your FSA file can prove on that date is your 2026 payment ceiling.
Keep Your Farm's Financial Records Audit-Ready
Payment-limit compliance is ultimately a recordkeeping problem: contributions, compensation, and income classification all have to be provable, per person, years after the fact. Beancount.io gives you plain-text accounting that's transparent, version-controlled, and queryable — so a per-member capital account history or a three-year farm-income split is a report you run, not a shoebox you search. Get started for free and make next September's certification a non-event.