If you farm through an LLC or an S corporation, the old rule that capped your whole operation at a single payment limit is gone. Starting with the 2026 program year, those entities get a payment limit for each owner who is actively engaged in the farm — the same treatment general partnerships have always enjoyed. For a lot of family operations across Minnesota and Wisconsin, that quietly multiplies the limit two, three, even four times over.

This came out of the One Big Beautiful Bill Act (OBBBA). The Commodity Credit Corporation finalized the rule on June 2, 2026, and it took effect immediately. It applies to 2026 and forward — it is not retroactive to 2025. USDA estimates the whole package moves roughly $864 million to producers over ten years, and most of that flows to multi-owner family farms.

Here is the catch, and it is the reason to read this now rather than in the fall: your structure on the September 15, 2026, snapshot date sets your limits for the 2026 crops. Get it right before then and the money is on the table. Miss it and you wait a year.

What actually changed

Before OBBBA, only general partnerships and joint ventures could “stack” limits — multiply the program limit by the number of owners. LLCs (plus other similar entities such as LLPs, LPs, etc.) and S corporations were stuck at one limit no matter how many family members owned the place. A four-member family LLC and a one-person LLC got exactly the same cap. That never matched how farms are really owned.

Now an LLC (one that hasn’t elected to be taxed as a corporation) and an S corporation are treated as a “qualified pass-through entity,” and each actively-engaged owner carries a limit. The 2026 ARC/PLC limit is tentatively about $164,000 per person — up from the old $125,000 and indexed to inflation going forward. Ignore any example you still see using $125,000; that figure is out of date. And keep the two changes straight: the limit itself went up, and separately, LLCs and S corps can now stack a limit per owner. Both levers are working in your favor at once.

Example: a three-generation family LLC

Johnson Family Farms LLC is taxed as a partnership and owned in equal shares by Dad, Mom, and two adult children — all four actively engaged. The farm has enough base acres that ARC/PLC would generate about $700,000 in 2026.

Under the old single-limit rule, the LLC captured $164,000 and stranded $536,000 above the cap. Under the new per-owner rule, four owners at $164,000 comes to $656,000 — the family captures almost all of it and forfeits only the last $44,000. That is a swing of nearly half a million dollars on the very same farm, with no change to a single acre.

The salary trap is gone, too

There is a second change that helps a lot of family operations. To draw a payment, a member still has to be actively engaged — real labor or management, plus capital, equipment, or land, all at risk. But in the past, if a family member took a salary or a guaranteed payment, that paid work was ignored when deciding whether they counted. Many operations tap-danced around it by adding an ownership layer. Starting in 2026, a member who makes a significant contribution of labor or management counts whether they are paid or not.

Example: the salaried daughter who now counts

Miller Farms, Inc. is an S corporation owned by Dad and his daughter. The daughter runs the day-to-day operation and draws a $90,000 salary; the S corp supplies the land and equipment. Under the old rule only Dad counted — one limit, $164,000 — because the daughter’s work was paid. Under the new rule she counts too, and the limit doubles to $328,000. Same people, same salary, same farm.

Don’t paper new owners on at the last minute

The rule rewards getting your structure right, but it does not reward gimmicks. You cannot add family members to the ownership chart on September 14 just to multiply limits. Any change that increases the number of owners has to be bona-fide — a genuine family addition, acquiring at least 20% more farmland, or a real sale or gift of equipment, land, or livestock. If you bring a son or daughter in, do it for real, document it, and have it done well before the deadline. A gift of stock or a membership interest also carries gift-tax reporting and estate-plan consequences, so coordinate it — don’t improvise it against an FSA deadline.

This is also a reason for C corporation owners to take a fresh look. A C corporation is not a pass-through entity and still carries one limit no matter how many family members farm. An S election can change that — but only after you run the income-tax math first, including built-in gains tax and any NOL or other carryovers. If the tax analysis supports the election, the per-owner payment limit becomes a nice tiebreaker. It should never drive the decision by itself.

One more door — but not for ARC or PLC

OBBBA also cracked open the $900,000 AGI cap for predominantly agricultural producers. If at least 75% of your average gross income comes from farming or ranching, that cap is waived for a set of disaster and conservation programs — think LFP for drought-hit livestock, ELAP, NAP, CRP, EQIP, and the like. That is real relief for a livestock operation sitting over the cap after a rough year. But read the fine print: this exception does not reach ARC or PLC. Those programs are not on the list, so a high-AGI producer is still barred from them even after clearing the 75% test.

What to do now

Pull your ownership chart and confirm who is actively engaged. File an updated operating plan and certify your entity type. If you are a multi-owner LLC or S corporation — or a C corporation worth converting — this is the year to sit down with your CPA and get the structure right before September 15. The opportunity is real, but it runs on that deadline.