NASHVILLE, TN – A provision in the One Big Beautiful Bill Act (H.R.1), signed into law July 3, 2025, changes how federal farm program payment limits apply to S corporations and limited liability companies (LLCs). Previously, these entities were treated as single individuals for payment purposes, capped at one payment limit — $125,000 — regardless of the number of owners. Partnerships and joint ventures, however, could access multiple limits, allowing each partner to qualify individually.
Under the new rules, S corps and LLCs are now considered “pass-through” entities for payment limitation purposes, similar to partnerships and joint ventures. Each active member or shareholder will have their own $155,000 limit, a 24% increase from the previous cap. The Secretary of Agriculture is authorized to adjust this amount annually for inflation.
The change is expected to simplify structuring for farms with multiple owners by eliminating the need for complex partnership arrangements to maximize benefits. It may also reduce legal and filing costs for new operations, while allowing larger farms to more fully access conservation, crop insurance, and disaster assistance programs.