The much-anticipated federal regulations tied to the One Big Beautiful Bill Act were published June 2, 2026. The regulations update and align FSA rules with modern farm business structures and outline how farm producers qualify for and comply with USDA program payments starting in the 2026 program year. Action is required for most operations prior to September 15, and proactive planning could help maximize 2026 and future crop year program payments.
What to know
1.Qualified pass-through entity category
“Qualified pass-through entities” (QPTEs), include general partnerships, S corporations, most LLCs, and joint ventures. This designation expands the types of entities that can receive multiple USDA payment limitations, previously limited to general partnerships and joint ventures.
2. Multiple payment limits for LLCs and S corps
FSA will treat most LLCs and S Corporations as pass-through entities. Payment caps scale with the number of qualifying owners, allowing multi-owner operations to significantly increase potential Payment continue to be attributed to each owner according to their ownership share. Example:
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- 2 owners →$125,000 × 2 = $250,000
- 4 owners →$125,000 × 4 = $500,000
3. Salaried members can qualify as actively engaged
Members who contribute labor or management may qualify regardless of how they are compensated. This change reduces the need for complex structuring and simplifies eligibility. However, members must still demonstrate significant contributions of active personal labor and/or management to qualify for benefits requiring actively engaged in farming determinations. Contributions must be commensurate and “at risk” to meet the requirements for being actively engaged in farming.
4. Operations utilizing loans require separate distinct funds
Farming operations must have separate capital from any other farming operation and contributions of capital, equipment, and land cannot be from a loan made by, guaranteed by, co-signed by, or secured by any person, entity, or joint operation that has an interest in the farming operation; example: family land entity, third-party landlord.
5. AGI certification shifts to individuals
QPTEs are exempt from adjusted gross income certification for 2026 and future years.
6. Expanded AGI exception
Producers above the $900,000 AGI threshold may still qualify if at least 75% of income comes from agriculture and payments tie to programs such as LFP, LIP, ELAP, TAP, NAP or conservation programs.
7. New mandatory reporting deadline: September 15, 2026
Entities must file or update operating plans and declare tax status by September 15, 2026 for 2026 program benefits. For future crop year, eligibility will be determined according to entity structure on June 1 each year, making timely organizational planning and any necessary restructuring critical.
