Recent court guidance has reinforced that agriculture can qualify for the federal and state research and development tax credits when farmers are using a documented process to improve crops, livestock, production methods, or farm efficiency.

Why this matters now

Farmers have always solved problems through trial, observation, and adaptation. What has changed is the level of clarity around when those activities may qualify for the federal R&D tax credit. In George v. Commissioner, T.C. Memo. 2026-10, the U.S. Tax Court analyzed research activities conducted by a large integrated poultry producer and allowed credits for trials that were designed to resolve technical uncertainty and supported by contemporaneous documentation. The case is especially important because it addressed livestock production directly and reinforced that agricultural experimentation is not limited to laboratories or technology companies.

For farm operations, this means activities that involve testing new approaches to improve yield, animal health, feed efficiency, disease resistance, crop quality, input use, or production consistency may deserve a closer look. The opportunity can apply across many parts of agriculture, including hogs, dairy, cattle, turkeys, poultry, corn, soybeans, dry beans, sugarbeets, peas, sweet corn, and other specialty crops.

What types of farm activities may qualify?

Qualified activities generally involve a process of experimentation intended to improve a product, process, formula, technique, invention, or software used in the business. On a farm, that might include work such as:

• Comparing different feed rations, additives, enzymes, probiotics, or mineral programs to improve growth, feed conversion, milk production, animal health, or survivability.
• Testing vaccine protocols, disease prevention strategies, ventilation changes, stocking densities, genetics, or animal handling practices.
• Evaluating seed varieties, planting populations, fertility programs, biological products, herbicide or fungicide programs, irrigation strategies, or tillage practices to improve yield, quality, standability, water use, or pest resistance.
• Experimenting with sugarbeet, dry bean, pea, sweet corn, or other specialty crop production practices to improve quality specifications, harvest timing, disease control, or processing characteristics.
• Developing or improving systems for manure management, nutrient utilization, water quality, precision agriculture, automation, or production data analysis.

The key is not whether the farm produced a crop or animal

A common misconception is that farm trials cannot qualify because the farm ultimately grows crops or raises animals for sale. The court guidance is more practical than that. If a portion of production is being used as part of a structured process to test alternatives and resolve technical uncertainty, the costs connected to that experimental activity may be considered. In agriculture, those costs may include more than traditional laboratory supplies. Depending on the facts, animals, feed, seed, fertilizer, crop inputs, or other production supplies used in a qualifying trial may be relevant qualified research expenses.

Documentation makes the difference

The R&D credit is not automatic. The strongest claims are built from records that already exist in the farm operation and show what was being tested, why it was uncertain, how the trial was designed, what data was collected, and what was learned. Good documentation may include trial plans, feed or ration records, seed and input records, field maps, flock or herd identifiers, production reports, agronomist notes, veterinary records, yield maps, milk production reports, mortality data, treatment logs, invoices, employee time records, and management notes.

In George, the taxpayer received credit for some trials but not others. That distinction is a valuable lesson: the court was willing to recognize agricultural research, but only where the taxpayer could connect the activity, costs, and records to a real process of experimentation. For farmers, the best time to document R&D is while the trial is happening—not months or years later.

Questions farmers should be asking

• Did we test more than one approach to solve a production problem?
• Was there uncertainty about the best method, formula, practice, or design when we started?
• Did we track results and use those results to make management decisions?
• Can we identify the fields, barns, flocks, herds, groups, acres, inputs, employees, and time connected to the trial?
• Do we have records that show the trial was planned and evaluated, rather than simply described after the fact?

How we can help

Our agribusiness team works with farmers to identify potential R&D credit opportunities, evaluate whether activities meet the tax rules, and build practical documentation processes that fit real farm operations. We understand that innovation on the farm often happens in the field, barn, parlor, shop, feed mill, or office—not in a formal research lab.

If your operation has been testing new ways to improve production, reduce losses, increase quality, manage disease, improve efficiency, or make better use of inputs, now is a good time to revisit whether those activities may qualify for the R&D tax credit.

Let’s talk. Contact our agribusiness tax team to discuss whether your farm’s trials, improvements, and problem-solving activities may create an R&D tax credit opportunity. Call Christianson at 888‑852‑5937 or fill out the form below.