TN 12 (01-12)

RS 02101.246 Share Farmers

A. Definition of share farmers

Share farmers are individuals, partnerships, or corporations that cultivate, operate, or manage farms for gain or profit.

B. Share farmers as employees

A share farmer is an employee when the landowner has the right to direct or control how the farmer performs and the farmer:

  • produces a crop or livestock on land belonging to another person;

  • receives a specified pay rate, and

  • receives a fixed sum of money, or fixed quantity of the crop or livestock (not a share of the crop or livestock or their proceeds).

C. Share farmers as independent contractors

A share farmer is an independent contractor (self-employed) under an income-sharing arrangement if he or she:

  • produces a crop or raises livestock on land belonging to another person; and

  • has a share of the crop or livestock, or

  • has proceeds from their sale that depends on the amount produced.

  • This applies if the farmer paid another person (an agent) to do the work or management for him or her.

D. References

  • IRS Publication 225, Farmer’s Tax Guide

  • IRS 1040 Instructions

  • Social Security Handbook, Chapter 1119: Definition of Share farmer

  • Social Security Handbook, Chapter 1120: “Undertakes to Produce a Crop" Defined for Sharefarming Arrangements

  • Social Security Handbook, Chapter 1121: Partnership or Joint Ventures Between Farm Owner and Operator

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RS 02101.246 - Share Farmers - 01/06/2012
Batch run: 07/03/2014