IRS Releases Interim Guidance on ACRE Act Tax Benefit

Posted: Nov 26 2025

The IRS has issued interim guidance for a new tax benefit for lenders serving rural and agricultural communities, which was included in a tax package passed by Congress earlier this year.

Among the provisions in the One Big Beautiful Bill Act was language allowing banks to exclude from gross income 25% of the interest they receive from loans secured by rural or agricultural real property. The provision was originally part of the Access to Credit for our Rural Economy Act, or ACRE Act, which is one of the American Bankers Association’s top legislative priorities in 2025.

According to the IRS, the interim guidance defines key terms from the law, establishes standards for determining whether a loan is secured by rural or agricultural property, and provides rules regarding refinancings. The guidance will remain in place until the Treasury Department and IRS issue regulations to implement the law.

The IRS is also inviting the public to comment on the proposed regulations, which can be submitted through the website regulations.gov.

To view the guidance, visit: https://www.irs.gov/pub/irs-drop/n-25-71.pdf