2014 Farm Bill

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UNITED STATES DEPARTMENT OF AGRICULTURE

FARM SERVICE AGENCY FACT SHEET March 2016

Average Adjusted Gross Income (AGI) Certification and Verification, 

2014-2018

OVERVIEW

The 2014 Farm Bill requires the implementation 

of an average adjusted gross income (AGI) 

limitation for payment eligibility for the 2014 

through 2018 program years. The AGI limitation 

provision applies to most programs administered 

by the Farm Service Agency (FSA) and Natural 

Resources Conservation Service (NRCS).

APPLICABILITY

All persons and legal entities requesting certain 

program payments, either directly or indirectly, are 

subject to the average AGI limitation provision. 

If a person’s or legal entity’s average AGI for the 

three taxable years preceding the most immediately 

preceding complete taxable year for which 

payments or benefits are requested exceeds the 

limitation, then the person or legal entity is 

ineligible for the applicable program payment or 

benefit. Further, program payments issued to an 

entity, general partnership or joint venture will 

be reduced by an amount commensurate with the 

direct and indirect interest of any member or 

interest holder who is ineligible because the 

member or interest holder’s average AGI exceeds 

the applicable limitation.

DEFINITIONS

Adjusted Gross Income: AGI for the individual is 

the Internal Revenue Service (IRS) reported 

adjusted gross income; or for a legal entity, a 

comparable measure as determined by the 

Commodity Credit Corporation (CCC).

Legal Entity: The term “legal entity” includes a 

corporation, joint stock company, association, 

limited partnership, charitable organization or 

similar entity, including any such entity or 

organization participating in the operation as a 

partner in a general partnership, a participant in 

a joint venture, a grantor in a revocable trust or a 

participant in a similar entity.

BASE PERIOD FOR DETERMINING 

AVERAGE AGI 

A three-year average AGI will be used to determine 

whether an individual or legal entity qualifies to 

receive program benefits subject to AGI rules. Base 

years for computing average AGI are:

ANNUAL CERTIFICATIONS

Participants in programs subject to average AGI 

rules must annually certify their eligibility to 

receive program benefits. The IRS requires written 

consent from the individual or legal entity to 

provide the U.S. Department of Agriculture 

(USDA) verification of the individual’s or legal 

entity’s certification of compliance with average 

AGI limitation provisions. Such annual average 

AGI certification and written consent are 

accomplished by completion of form CCC-941, 

Average Adjusted Gross Income (AGI) 

Certification and Consent to Disclosure of Tax 

Information.

Producers and their members and interest holders 

are encouraged to submit the completed CCC-941 

before payments and benefits are requested under 

USDA programs that are subject to the average 

AGI limitation. Producers can mail or return the 

completed CCC-941 directly to the appropriate 

USDA service center. As required by law, 

producers must sign the CCC-941 to grant the 

IRS the authority to use tax information for the 

purpose of AGI compliance verification requested 

by USDA. Failure to provide the certification and 

consent will result in the determination of 

ineligibility and the required refund of applicable

For Crop Year: AGI Base Years Are:

2014 2010, 2011, 2012

2015 2011, 2012, 2013

2016 2012, 2013, 2014

2017 2013, 2014, 2015

2018 2014, 2015, 2016
FACT SHEET

Average AGI Certification and Verification, 2014-2018 March 2016

program payments received from FSA and NRCS. Form CCC-941 may be obtained from local FSA

and NRCS offices or online at

http://forms.sc.egov.usda.gov/efcommon/eFileServices/eFormsAdmin/CCC0941_140328V01.pdf.

AGI LIMITATION

The $900,000 average AGI limitation is as follows.

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IF the average AGI exceeds...

THEN the person or legal entity is ineligible for 

payments and benefits under the following programs...

$900,000

(Average AGI, or comparable 

measure, of the person or legal 

entity over the three taxable 

years preceding the most

immediately preceding 

complete taxable year for which 

payments or benefits are 

requested. Exclude any years 

for which the person or legal 

entity did not have taxable 

income.)

Oct. 1, 2011, and subsequent years:

 Livestock Indemnity Program (LIP)

 Livestock Forage Disaster Program (LFP)

 Emergency Assistance for Livestock, Honeybees 

and Farm-Raised Fish Program (ELAP)

 Tree Assistance Program (TAP)

2014 and subsequent years:

 Noninsured Crop Disaster Assistance Program 

(NAP)

2014-2018:

 Price Loss Coverage (PLC)

 Agriculture Risk Coverage (ARC)

 Marketing Loan Gain (MLG)

 Loan Deficiency Payment (LDP)

 Agricultural Management Assistance (AMA)

2014-2015 only:

 Transition Assistance for Producers of Upland 

Cotton

2015 and subsequent years:

 Conservation Reserve Program (CRP)

 Environmental Quality Incentives Program (EQIP)

 Conservation Stewardship Program (CSP)

 Agricultural Conservation Easement Program 

(ACEP)

 Regional Conservation Partnership Program

 Conservation of Private Grazing Land Program

 Farmable Wetlands Program

 Grassroots Source Water Protection Program

 Voluntary Public Access and Habitat Incentive 

Program
TRACKING AGI COMPLIANCE 

THROUGH LEGAL ENTITY OWNERSHIP

Compliance with the average AGI limitation is 

tracked through four levels of legal entity 

ownership. If individuals or legal entities within 

those four levels do not comply with average AGI 

limitation provisions, payments to the participating 

legal entity will be reduced by an amount 

commensurate with the ineligible share.

If the participant is a general partnership or joint 

venture, average AGI certifications are required 

from each:

• Member who is an individual or legal entity; 

and

• Embedded interest holder.

If the participant is a legal entity, average AGI 

certifications are required from:

• The participating legal entity;

• Each interest holder who is an individual or 

legal entity; and

• Each embedded interest holder.

AVERAGE AGI VERIFICATION 

PROCESS

USDA and IRS developed an electronic 

information exchange process strictly for the 

purpose of average AGI certification verification. 

This process involves a series of IRS calculations 

of specific line items on IRS tax forms for the 

applicable three-year period to arrive at the 

average amount. IRS then compares this value to 

the average AGI limitation. USDA receives 

indicators when a program participant appears to 

meet or not meet the AGI requirement. USDA does 

not receive any actual tax data from IRS. 

Participants who USDA receives confirmation 

that the average AGI limitation was not exceeded 

will remain eligible for program benefits and no 

further actions are necessary. For any participant 

who appears to exceed the average AGI limitation, 

the participant’s average AGI certification will be 

evaluated further by FSA state office personnel.

STEP-BY-STEP PROCESS

The following steps describe the average AGI 

certification and verification processes:

• FSA and NRCS provide producers with an 

average AGI certification and consent form 

(CCC-941) to complete. The CCC-941 

includes the participant’s certification of

 average AGI compliance for the appropriate

 year and authorizes the IRS to disclose to

 USDA tax-related information for the AGI

 compliance purposes for the indicated year

 only.

• Producers (and each of the producer’s 

members and interest holders) complete and 

return CCC-941 forms by mail or in person to 

the appropriate USDA service center (address 

printed in the upper right-hand corner, first 

page).

• FSA submits the completed CCC-941 forms to 

the IRS for processing.

• The IRS checks each participant’s (and each 

participant’s direct and indirect member or 

interest holder) average AGI certification by 

performing computerized calculations that 

indicate whether or not the participant (or the 

participant’s direct and indirect member or 

interest holder) may exceed the average AGI 

limitation.

• Persons and legal entities for whom IRS has 

indicated as meeting the AGI limitation will 

remain eligible for program benefits and no 

further actions are necessary for that person or 

legal entity for the year.

• Producers whose average AGI appears to 

exceed the average AGI limitation will be

 notified in writing of the results and provided

 an opportunity to make available within 

 30 days to the applicable FSA office:

o A third-party verification from a certified

 public accountant or attorney of their

 average AGI that demonstrates the limit has

 not been exceeded; or

o Copies of the complete federal tax returns

 that were filed with the IRS for the

 applicable tax years under review.

• Producers determined not to be in compliance 

with AGI limitation will be offered appeal 

rights to either FSA or the National Appeals 

Division.

FACT SHEET

Average AGI Certification and Verification, 2014-2018 March 2016

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FACT SHEET

Average AGI Certification and Verification, 2014-2018 March 2016

• Producers who fail to respond to written 

notices of average AGI non-compliance or who 

are determined non-compliant will be notified 

of the requirement to refund the applicable 

program payments. Actions required by the 

Debt Collection Improvement Act will be 

followed by NRCS and FSA.

_________________________________________

In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, 

the USDA, its Agencies, offices, and employees, and institutions 

participating in or administering USDA programs are prohibited 

from discriminating based on race, color, national origin, religion, 

sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income 

derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program 

or activity conducted or funded by USDA (not all bases apply to 

all programs). Remedies and complaint filing deadlines vary by 

program or incident.

Persons with disabilities who require alternative means of communication for program information (e.g., Braille, large print, 

audiotape, American Sign Language, etc.) should contact the 

responsible Agency or USDA’s TARGET Center at (202) 720-2600 

(voice and TTY) or contact USDA through the Federal Relay 

Service at (800) 877-8339. Additionally, program information may 

be made available in languages other than English.

To file a program discrimination complaint, complete the USDA 

Program Discrimination Complaint Form, AD-3027, found online 

at http://www.ascr.usda.gov/complaint_filing_cust.html and at any 

USDA office or write a letter addressed to USDA and provide in 

the letter all of the information requested in the form. To request 

a copy of the complaint form, call (866) 632-9992. Submit your 

completed form or letter to USDA by:

1) mail: U.S. Department of Agriculture Office of the Assistant

 Secretary for Civil Rights 1400 Independence Avenue, SW

 Washington, D.C. 20250-9410;

2) fax: (202) 690-7442; or

3) email: program.intake@usda.gov.

USDA is an equal opportunity provider, employer, and lender.

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