Massachusetts Farming and Fisheries Credit

Farming and Fisheries Credit
Schedule FAF
Massachusetts Department of Revenue

Schedule FAF
Farming and Fisheries Credit

2023

Name as shown on Massachusetts tax return 		

Social Security number(s)

Address (do not enter PO box)	

City/Town 	

State 	

Zip

Type of business. (Fill in one oval only. Complete a separate schedule for each type of business.)	

● Agricultural/farming

● Commercial fishing

If lessor or lessee, fill in applicable oval, skip Part 1 and complete Part 2. (If lessor, see instructions.)	

● Lessor

● Lessee

Description of property, or address if real property	

Part 1. Calculation of current year Farming and Fisheries Credit
1	 Amount of qualifying property acquired, constructed or erected during 2023 (see instructions) . . . . . . . . . . . . . . . . . . . . .  1	
2	 Farming and fisheries credit available for 2023. Multiply line 1 by 0.03 (3%). Note: Be sure to complete Part 3. . . . . . . . . . .  2	

Part 2. Calculation of current year Farming and Fisheries Credit for lessor or lessee
1	 Adjusted basis of qualifying property acquired, constructed or erected during 2023 (see instructions). . . . . . . . . . . . . . . .  1	
2	 Multiply line 1 by 0.03 (3%). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2	
3	 Number of days in the tax year during which the lessee leases the qualifying property. . . . . . . . . . . . . . . . . . . . . . . . . . . . 3	
4	 Number of days in the useful life of property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  4	
5	 Divide line 3 by line 4. Be sure to carry out division to six places. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5	
6	 Farming and fisheries credit available for 2023. Multiply line 2 by line 5. Note: Be sure to complete Part 3 . . . . . . . . . . . .  6	

Part 3. Computation of Farming and Fisheries Credit allowable on return
1	 Total farming and fisheries credit available for this year. Add Part 1, line 2 and Part 2, line 6 . . . . . . . . . . . . . . . . . . . . . . .  1	
2	 Unused credit from prior years (from 2022 Schedule FAF, line 7, col. c; see instructions). . . . . . . . . . . . . . . . . . . . . . . . . . . .  2	
3	 Massachusetts farming and fisheries credit available this year. Add lines 1 and 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  3	
4	 Total tax from return (from Form 1, line 28; Form 1-NR/PY, line 32; or Form 2, line 41) less limited income credit, and/or
credit for taxes due to other jurisdictions, and/or certain other credits, if any. Not less than 0 (see instructions). . . . . . . . .  4	
5	 Massachusetts farming and fisheries credit allowable this year (smaller of lines 3 or 4). Enter here and on Schedule CMS.
Note: You must enclose Schedule FAF with your return. Failure to do so will result in this credit being disallowed on your
tax return and an adjustment to your reported tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  5	

Unused Massachusetts Farming and Fisheries Credit carryover
6	 Complete only if Part 3, line 3 is more than Part 3, line 5, or if you have unused credits from prior years.

Year
2021
2022
2023
7	

Totals

a. Unused credits from prior years
and current year credit	
(2022 Sch. FAF, line 6, col. c)	 	 _______________
(2022 Sch. FAF, line 6, col. c)	 	 _______________	
(2023 Sch. FAF, Part 3, line 1) 	 _______________

b. Portion used
this year
________________
________________
________________

c. Unused credit available
						Subtract col. b from col. a
Amount

For

________________
________________
________________

2024
2024-2025
2024–2026

			
_______________	________________	________________	

Schedule FAF Instructions
General Information
What is the farming and fisheries credit?
The farming and fisheries credit is similar to the investment credit available to manufacturing, R&D corporations and corporations primarily
engaged in agriculture or commercial fishing. The new credit applies to
personal income taxpayers who are primarily engaged in agriculture,
farming or commercial fishing. The amount of the credit is 3% of the cost
or other basis for federal income tax purposes of qualifying property acquired, constructed or erected during the tax year. This credit is effective
for tax years beginning on or after January 1, 2015.

What is qualifying property?
Qualifying property is defined as tangible personal property and other
tangible property including buildings and structural components thereof
which are located in Massachusetts, used solely in farming, agriculture or
fishing, and are depreciable with a useful life of at least four years.

What if I am a lessor or lessee?
The law allows the same credit to lessees calculated as follows: 3% of
a lessor’s adjusted basis in qualifying property for federal income tax
purposes at the beginning of the lease term, multiplied by a fraction, the
numerator of which is the number of days of the tax year during which
the lessee leases the qualifying property and the denominator of which
is the number of days in the useful life of the property. Where the lessee
is eligible for the credit, the lessor is generally not eligible, with the exception of “equine-based businesses where care and boarding of horses is a
function of the agricultural activity.”

Is there a recapture provision?
If the property on which a credit is taken is disposed of or ceases to be in
qualified use prior to the end of its useful life, the difference between the
credit taken and allowed for actual use must be added back as additional
taxes due in the year of disposition, unless the property has been in
qualified use for more than 12 years.

What if my farming and fisheries creditis larger than my tax
liability?
If your farming and fisheries credit is greater than the amount you owe
in personal income tax for the year, the balance of unused credit may be
carried over into the next tax year. You may carry over an unused portion
of the original credit, as reduced from year to year, for up to three subsequent tax years.