LINCOLN, Neb. — Nebraska Farm Bureau and Nebraska’s congressional delegation are sounding the alarm on a looming tax increase that could strike a major financial blow to families, businesses, and farmers and ranchers across the state. As key provisions of the 2017 Tax Cuts and Jobs Act (TCJA) set to expire at the end of 2025, NEFB is warning that inaction by Congress could devastate families and rural communities.

“The uncertainty surrounding the future of these tax provisions is causing real concern,” said Mark McHargue, NEFB president. “These reforms helped level the playing field for agriculture. Losing them would hit producers hard at the worst possible time.”

The TCJA, signed into law during the Trump administration, made significant changes to the federal tax code — including provisions that were especially beneficial to agriculture and other family businesses. For many farm and ranch families, it meant lower tax rates, higher estate tax exemptions, and greater flexibility in managing income and business deductions. But unless Congress acts, many of those provisions are set to sunset at the end of 2025, returning tax law to pre-2017 standards.

ESTATE TAXES

One of the biggest concerns among farm and ranch families is the potential roll back of the estate tax exemption, often referred to as the “death tax.” The TCJA temporarily doubled the indexed for inflation estate tax exemption to now over $13.9 million per person (over $27.9 million for couples), allowing most family farms to pass from one generation to the next without triggering a tax bill. However, if the exemption reverts to its 2017 level — around $5.5 million — it could force some families to sell land or assets just to pay the tax.

“Land values in Nebraska are high, and many family farms and ranches could be subject to the estate tax again if the exemption drops. Farm and ranch families work to build something to pass down. This could threaten that,” said McHargue.

PASS-THROUGH DEDUCTIONS

Also on the chopping block is the 20% qualified business income (QBI) deduction for pass-through entities such as sole proprietorships, partnerships, and S-corporations — common business structures in agriculture. The deduction has helped farmers reduce their taxable income and reinvest in their operations. If the QBI deduction expires, those same farms could see a substantial jump in their federal tax liability.

“We’re already working on tight margins with input costs and interest rates continuing to be at high levels,” said McHargue. “Losing these tax provisions would hit us hard at a time when we can least afford it.”

 Another important provision at risk is bonus depreciation, which allows farmers to reduce the cost of new and used equipment in the year it’s purchased. The TCJA temporarily expanded this benefit to 100%, encouraging investment in updated machinery and infrastructure. But bonus depreciation is already phasing down, and unless extended, it will fully be sunset by 2027.

“Bonus depreciation helped us modernize our equipment without killing our cash flow. Losing that would make upgrades a lot harder,” McHargue emphasized.

CALL FOR ACTION

With the clock ticking, the Nebraska Farm Bureau and its congressional delegation is calling on Congress to extend these important provisions and avoid what they describe as a “tax hike on working families.”

“The expiration of the TCJA would serve as a tax increase for virtually everyone and every business in the United States,” said McHargue. “This is about preserving family farms and ranches, keeping rural communities alive, and ensuring that Nebraska agriculture remains strong for generations to come.”

The organization is calling on policymakers to prioritize rural America in upcoming tax negotiations, especially as inflation, interest rates, and commodity price fluctuations continue to pressure producers.

“We’re not asking for special treatment,” said McHargue. “We’re asking for fair tax policy that reflects the long-term nature and unique challenges of farming and ranching.”