Resource Enhancement & Protection (REAP)
REAP is a first-come, first-served program that enables farmers, businesses, and landowners to earn PA income tax credits to offset the cost of implementing conservation practices. Tax credits provided by the REAP program helps farmers off-set the costs of implementing best management practices (BMPs) that benefit their farms and work to protect water quality at the same time.
Guidelines & Uses
Eligibility for the program is based on compliance with the PA Clean Streams Law.
For agricultural operations, this means:
- Up-to-date Agricultural Erosion and Sedimentation (E&S) Plans and Manure/Nutrient Management Plans for all acres farmed.
REAP tax credits may be used to pay PA income tax for any individual or entity that has Pa income tax obligations, dollar-for-dollar, for up to 15 year from the date of issuance.
The credits can be sold or transferred one year after issuance.
Agricultural operations are eligible for up to $250,000 of REAP tax credits in a 7-year period.
Non-ag businesses and individuals can earn PA REAP tax credits by sponsoring an eligible project.
REAP provides tax credits at levels of 50%, 75%, or 90% of costs incurred in the implementation of BMPs that reduce nitrogen, phosphorus, and sediment pollution.
- Projects eligible for 50% reimbursement: no-till planting equipment; precision nutrient application equipment; manure storage structures; cover crops; grazing practices; forested riparian buffers; others
- Projects eligible for 75% reimbursement: BMPs that reduce pollution runoff from animal concentration areas; Nutrient/Manure Management Plans; Conservation/Ag E&S Plans; others
- Projects eligible for 90% reimbursement (In a TMDL designated watershed) - multi-species cover crops; forested riparian buffers (50+ ft wide); livestock exclusion from streams and associated practices; others
- Planning & Engineering
- Labor – contractor or farmer/landowner
- Post-construction expenses
- 1 year of interest payments (if applicable)
How to Apply
Tax Credits are awarded on a first-come, first-served basis and applications are accepted until available tax credits for the year are exhausted.
REAP differs from traditional conservation programs. PA tax credits are issued after the installation of a practice or purchase of eligible equipment. State or federal cost-share portions of a project are ineligible for REAP tax credits.
Through REAP's sponsorship program, another business could help finance a project and apply for the tax credit instead of the producer.
An accountant or other financial professional can advise farmers on the benefits of REAP for their operation.
REAP tax credits may be sold, and there are individuals and corporations that wish to reduce their tax liability by purchasing tax credits. Several brokers in Pennsylvania help arrange tax credit sales.