Purpose of form
Form IT-217 is used to determine if you are eligible to claim the farmers’ school tax credit and to determine the amount of the credit. If you are engaged in the business of farming (see Definitions below), complete Part 1 of Form IT-217 to determine if you are eligible to claim the farmers’ school tax credit.
Definitions
You are engaged in the business of farming if you cultivate, operate, or manage a farm for gain or profit, even though the operation may not produce a profit every year.
You are engaged in the business of farming if you are a partner in a partnership, a shareholder in a New York S corporation, a shareholder in a New York C corporation that has a special gross income from farming election, or the beneficiary of an estate or trust that operates or manages a farm for gain or profit.
You are also engaged in the business of farming if you rent your farm property to another person who uses the property in agricultural production, and the rental arrangement meets one of the following conditions:
- The amount of the rental is a crop share (shared rental agreement); that is, the amount of rent is based upon the actual production of the land, whether paid to you in cash or in kind; or
- You have an arrangement with your tenant for your participation in the farm business, and you meet one of the following four tests:
Test 1 – You do any three of the following:(1) pay or stand good for at least half of the direct costs of producing the crop; (2) furnish at least half of the tools, equipment, and livestock used in producing the crop; (3) consult with your tenant; and (4) inspect the production activities periodically.
Test 2 – You regularly and frequently make, or take an important part in making, management decisions substantially contributing to or affecting the success of the enterprise.
Test 3 – You work 100 hours or more spread over a period of five weeks or more in activities connected with crop production.
Test 4 – You do things which, considered in their total effect, show that you are materially and significantly involved in the production of farm commodities.
NY IT-217 Instructions