Colorado launches new tax credit for farm stewardship

BROOMFIELD, Colo. — Colorado farmers and ranchers will soon have access to a new tax credit rewarding sustainable land management and environmental stewardship.

The Colorado Department of Agriculture announced that applications for the Agricultural Stewardship Tax Credit will open Nov. 10. The program, which begins in 2026, offers refundable state income tax credits for producers who implement practices that improve soil health, conserve water and support biodiversity.

Eligible producers may receive up to $300,000 annually for three years, depending on the practices adopted and the acreage involved. The department expects to issue $3 million in tax credits each year. Producers who apply this fall will be required to put their chosen practices in place throughout 2026 and may then apply the credit toward their 2026 state income taxes.

Governor Jared Polis said the program recognizes agriculture’s role in Colorado’s economy and environment. “Our farmers and ranchers are true stewards of our lands, and this tax credit supports their efforts to improve soil health, protect our water resources and more,” he said.

The credit covers 17 practices, ranging from annual efforts, such as managed grazing and reduced tillage to longer-term strategies like overseeding and virtual fencing. Other methods, including irrigation and nutrient management, are also eligible for consideration. Officials said the range of options allows producers to choose practices that best fit their operations while improving profitability.

“The value of these practices extends beyond improved farm viability for producers, benefiting the entire state through improved soil health, water retention and quality, and biodiversity,” said Evanne Caviness, director of CDA’s Conservation Services Division.

CDA worked with agricultural stakeholders over the past year to design the list of eligible practices. The effort is part of the department’s 2024-2027 strategic plan, which emphasizes environmental stewardship, regenerative practices and water resilience.

Two informational webinars are scheduled for Oct. 9 at 10 a.m. and Oct. 16 at 6 p.m. to guide applicants through the program and answer questions. Registration details are available on CDA’s website.