573: 2024 Form 573 Farm Income Averaging (2024)
Oklahoma · Oklahoma Tax Commission · Used for tax years 2024
Oklahoma Form 573 lets you elect to calculate your 2024 tax by averaging all or part of your taxable farming income over the three previous base years, 2021 through 2023. It calculates the tax to enter on Form 511 or Form 511-NR and must be included with your Oklahoma tax return.
Who files this form
Use Form 573 if you choose to figure your 2024 Oklahoma tax by averaging all or part of your taxable farming income over the three previous base years: 2021, 2022 and 2023.
This is an election, not a requirement for everyone with farming income. It may lower your tax if your 2024 farming income is high and your taxable income in one or more of the three prior years was low.
What you'll need
Have these forms and figures available:
- Your 2024 Form 511 or Form 511-NR, for your current-year taxable income.
- The amount of your 2024 taxable farming income you choose to average.
- Your 2021, 2022 and 2023 Forms 511 or 511-NR, for prior-year taxable income and tax.
- Any Forms 573 you used for 2021, 2022 or 2023. Page 3 explains when to use figures from those forms instead of your regular returns.
- If net operating loss adjustments apply, your relevant Form 511-NOL or 511-NR-NOL Schedules A and B.
The form also asks for your name and Social Security number.
How to file
Provide Form 573 with your Oklahoma tax return.
Enter the tax from Form 573, line 22, on Form 511, line 14a, or Form 511-NR, line 15a. Enter a “1” in the box for “Farm Income Averaging.”
Common mistakes
- Electing too much income: The elected farm income on line 2 cannot exceed the taxable income on line 1.
- Handling negative amounts incorrectly: If line 7 is less than zero, enter “0.” If line 11 or line 15 is less than zero, enter it as a negative amount.
- Missing net operating loss adjustments: For base-year taxable income, add back that year's NOL being carried to another year. Also add back any unused NOL carryover or carryback being carried to the following year, as directed in the instructions for lines 5, 9 and 13.
- Forgetting the election box: When transferring line 22 to your return, enter a “1” in the “Farm Income Averaging” box.
- Leaving out Form 573: Provide it with your Oklahoma tax return.
Questions people ask
Do I have to average all of my farming income?
No. You may elect to average all or part of your 2024 taxable farming income. The amount on line 2 cannot exceed line 1.
Which years are used for the 2024 election?
The three base years are 2021, 2022 and 2023. Form 573 divides your elected farm income by three and combines that amount with each base year's taxable income.
Can gains from selling farm property count as farming income?
A gain from selling or otherwise disposing of property other than land is treated as attributable to your farming business if you regularly used the property in that business for a substantial period.
What if I used Form 573 in an earlier year?
Follow the directions on page 3 to determine your base-year taxable income and tax. Depending on when you used Form 573, you may need figures from an earlier Form 573 rather than from Form 511 or Form 511-NR.