Farm Tax ID Explained: Benefits, Eligibility, and How to Apply

As the end of the financial year approaches, it's a great time for small farmer operators to review potential tax benefits and deductions. One common question we hear at Tractor Tools Direct is: Should I apply for a farm tax ID?

If you haven’t yet structured your farm as a business, obtaining a farm tax ID could offer significant advantages—ranging from tax exemptions on equipment to access to USDA programs. Let’s explore what a farm tax ID is, who’s eligible, and how it could help you save money and grow your farming operation.

What Is a Farm Tax ID Number?

A farm tax ID number, also known as an Employer Identification Number (EIN), is a unique 9-digit number issued by the IRS. Think of it as a Social Security Number for your farm business. It officially recognizes your farm as a legitimate business entity, which opens the door to a range of financial, tax, and government resources.

For example, if you're looking to purchase farm equipment like the Ibex TX31 Mini Round Baler with Twine Wrap, having a farm tax ID could allow you to claim a sales tax exemption (depending on your state’s laws) and possibly write off the expense on your income taxes.

Who Qualifies for a Farm Tax ID?

To be eligible for a farm tax ID, you must:

• Be actively involved in operating your farm for profit.
• Treat your farming as a business, not a hobby.
• Have the knowledge and intent to make the operation financially viable.

Hobby farms don’t qualify for tax deductions or business benefits—only legitimate for-profit farming operations are eligible.

Why Get a Farm Tax ID?

There are multiple compelling reasons to apply for a farm tax ID number:

Access Tax Exemptions & Deductions

Your farm tax ID allows you to exempt certain purchases from sales tax and claim deductions for business expenses—including tools, equipment, feed, and more. Many farmers use this strategy for year-end purchases to reduce tax liability.

Unlock Government Resources

With a farm tax ID, you can apply for:

• Farm Service Agency (FSA) loans
• Crop insurance programs
• Disaster assistance
• Other USDA programs

Participate in the Agricultural Census

Having a tax ID ensures your farm is counted in the U.S. Agricultural Census, which helps guide resource allocation and program development in your area.

Vote on Local FSA Committees

Your farm’s registration gives you a voice in electing local committee members who shape the direction of USDA programs in your county.

How to Apply for a Farm Tax ID?

The good news? Getting your farm tax ID is free and fairly easy. Here are three ways to apply:

1. In Person via Your Local FSA Office

• Schedule an appointment with your local Farm Service Agency.
• Bring documents like your driver’s license, Social Security card, and proof of land control.
• The FSA staff will guide you through the process and assign you a number.

2. By Phone

• Call the IRS at 800-829-4933.
• A representative will help you complete the application over the phone.
• Have your documentation ready.
• Your EIN will be issued immediately, with a paper copy arriving by mail.

3. Online via the IRS Website

• Visit: IRS EIN Application Portal
  
• The application must be completed in one session, so gather all necessary information before starting.
• You’ll receive your number instantly upon submission.

Final Thoughts: Is a Farm Tax ID Right for You?

If you're running your farm as a business—or planning to start—getting a farm tax ID number is a smart move. It not only formalizes your operation but also opens the door to valuable tax benefits, government programs, and financial tools that can help your farm thrive.

And remember, here at Tractor Tools Direct, we’re always happy to help our customers navigate the equipment and tools that support their farm businesses. If you’re considering year-end equipment purchases, a farm tax ID could make those investments even more cost-effective.

Don’t wait—apply now and position your farm for a more profitable future! Need help or have questions? Just give us a call at 260-225-3429. A team member will be happy to assist you!