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Tax Benefit for Agricultural and Rural Lending (IRC Section 139L)
Illinois — state program25% exclusion of interest income from federal taxable income
A new IRC Section 139L provision allows eligible lenders to exclude 25% of interest income earned on qualifying loans secured by farm or rural real property from federal taxable income. The remaining 75% of interest income must still be included in taxable income. Qualifying loans must be secured by farm or rural real property primarily used for agricultural or rural purposes and made on or after July 4, 2025.
Program details
- Type
- tax-credit
- Amount
- 25% exclusion of interest income from federal taxable income
- Eligibility
- Qualified lenders, which generally include: U.S. banks and savings associations, certain regulated insurance companies, Farm Credit System institutions, and other lenders that meet IRS eligibility requirements. Loans must be secured by farm or rural real property, involve property primarily used for agricultural or rural purposes, be made on or after July 4, 2025, and be secured by the property itself.
- Status
- open
- Administrator
- IRS
Source: Illinois — state program. Confirm current terms with the administering agency before applying.