We want to make you aware of a USDA program that may be relevant if you are dealing with red blotch or other vine loss issues in your vineyard.

You may have seen our prior note about another program that expired on March 13. This is a different program with a different purpose and timeline.

This program is called TAP, which stands for the Tree Assistance Program. It can help vineyard owners recover from vine loss by providing financial support for removing and replanting vines that are no longer commercially viable.

If you are dealing with issues like red blotch or other conditions impacting vine productivity, this program may help offset a portion of your replanting costs.

Before you remove any diseased vines, we strongly recommend reviewing this program and the required steps. Starting work too early can disqualify you from receiving reimbursement.

The process is detailed and requires specific steps to qualify, so we created a guide that walks through:

• What the program is
• Who qualifies
• Application steps
• What to avoid

You can read the full article here.

Many vineyard owners may qualify for new federal financial assistance, but an important first deadline is approaching.

The US Department of Agriculture has created the Assistance for Specialty Crop Farmers program to provide financial support to growers affected by recent market disruptions. Wine grapes are included as an eligible specialty crop.

For grape growers, the most important immediate requirement is acreage reporting.

To remain eligible for payments, growers must ensure that their 2025 planted grape acreage is accurately reported with the Farm Service Agency by 5 p.m. Eastern Time on March 13, 2026.

Go here for additional information and to file https://www.fsa.usda.gov/resources/programs/farmer-bridge-assistance-fba-program 

This step is required even if the vineyard has reported acreage in prior years. Payments under the program will be calculated based on reported 2025 planted acres.

After acreage is confirmed with FSA, eligible growers will be able to submit an application for the payment through the USDA system or through their local FSA office.  Note that there are AGI (Adjust Gross Income) limitations for qualification that apply across entities owned by a common owner. 

What vineyard owners should do now

1. Confirm whether your vineyard has a current Farm Service Agency acreage report on file for the 2025 crop year.

2. If acreage has not yet been reported, contact your local FSA office immediately to complete the filing.

3. Gather documentation that may be requested, such as ownership records, lease agreements, or property tax documentation.

For anyone who owns a vineyard, timely acreage reporting will be the key step to preserve any potential eligibility for this program. 

Fruitful Innovation Can Lead to Tax Benefits

Napa has never had the luxury of standing still. This valley adapts. When the weather shifts, growers adjust. When consumer preferences change, winemakers experiment. New rootstock. New clones. Different planting locations. New production techniques. Reinvention here is not a trend. It is how we survive.

That is innovation.

And in many cases, it is also research.

We are not talking about changing a label design or launching a new club tier. We're talking about the real technical questions you wrestle with in the vineyard and the cellar:

Can this new grape clone handle higher temperatures?
Will adjusting canopy management reduce sunburn without sacrificing ripeness?
Can we modify fermentation to improve stability or manage alcohol levels?
Is there a way to produce a non-alcohol option that still feels like wine?

When you do not know the answer and you run trials to find it, you are eliminating uncertainty. You are experimenting. You are applying biology, chemistry, and production science to improve a product or process.

That is the kind of activity the federal research credit was designed to support.

Where Wineries Often Miss the Opportunity

Many owners assume research only happens in tech companies or pharmaceutical labs. In reality, agriculture and food production have long qualified when there is genuine experimentation involved.

If you are:

• Running pilot lots to test new fermentation methods
• Trialing new grape varieties or clones in response to climate pressure
• Experimenting with irrigation strategies or canopy adjustments
• Testing new processes to improve quality, consistency, or resilience

you may be performing qualified research.

Even certain supply costs, including grapes used in true experimental batches or vineyard trials, can potentially be included in the research credit calculation. The key word is experimental. Routine commercial production does not count. Structured trials aimed at solving a technical problem may.

Deduction Versus Credit

There are two potential tax benefits tied to research activities.

Research costs may be deductible. In addition, qualifying activities may generate a federal research tax credit. A deduction reduces taxable income. A credit directly reduces the tax you owe.

For many wineries, the credit is where the most meaningful benefit lies.

Documentation Is Everything

Innovation alone is not enough. You must be able to show what you were trying to solve and how you went about solving it.

That means documenting:

• The technical problem or uncertainty
• The trials or experiments performed
• Who was involved
• What supplies were used and how much they cost

If you are already treating vineyard trials and cellar experiments with discipline, you are halfway there. If experimentation is happening informally without clear records, it becomes much harder to support a claim.

The Bottom Line

Innovation in Napa is not optional. Climate pressure, evolving consumer expectations, and quality standards demand it.

If you are investing time, fruit, and expertise into solving real technical challenges, it is worth exploring whether those efforts qualify for research related tax benefits.

Fruitful innovation does more than improve your next vintage. It may also improve your bottom line at tax time.

We’re not debating calories or whether that charcuterie board counts as an appetizer or dinner. We're talking about the IRS tightening the rules for deductible meals. 

Starting January 1, 2026, some winery meals that have historically been deductible will become completely nondeductible.

• Same harvest crew.
• Same pizza.
• Different tax result.

Here is what changes and what does not.

1. Harvest Meals on Winery Premises

Zero Deduction Beginning in 2026

If you provide meals at the winery so employees can keep working, those meals will no longer be deductible starting in 2026.

That includes:

• Crush pad dinners
• Bottling day lunches
• Late night production meals served on site

For years these were deductible. Beginning in 2026, they are not.

If harvest meals are a routine part of your operations, this is worth budgeting for now.

2. Occasional Overtime Meal Reimbursements

Possibly Still 50 Percent Deductible

If an employee unexpectedly works late and you reimburse them for dinner, that may still qualify for a partial deduction.

But it must be:

• Occasional, not routine
• Truly overtime beyond normal hours
• Not a fixed allowance

If Friday night pizza is standard policy during harvest, that likely will not qualify. If a pump fails and someone stays late once in a while, that is different. Documentation matters.

3. Hosted Wine Dinners

Often Not a Meal Deduction at All

This is where wineries frequently get confused.

If you host a winemaker dinner and:

• The restaurant charges guests
• You provide the wine
• You send a winemaker to speak

You are not deducting a meal.

You are deducting:

• The cost of the wine
• Travel
• Marketing expenses

That is a marketing expense, not a meal limitation issue.

Many wineries mistakenly limit this to 50 percent when they do not need to.

4. When You Pay for the Dinner

If you pick up the tab for key buyers or distributors, that is a business meal.

That remains partially deductible, generally at 50 percent.

The difference is simple:

• If you are pouring wine and someone else is serving dinner, you likely do not have a meal deduction issue.
• If you are paying for dinner, you do.

What About California?

Here is where it gets interesting.

California has specifically chosen not to adopt the federal changes made by the Tax Cuts and Jobs Act to the employer fringe benefit deduction rules.

What does that mean?

Beginning in 2026:

Federally
Employer-provided meals for the convenience of the employer go to 0% deductible.

California
Those same meals may still be 50% deductible.

In other words, the exact same harvest pizza could be:

0% deductible on your federal return
50% deductible on your California return

That creates a federal-state difference that will need to be tracked beginning in 2026.

The Bottom Line for 2026

Wineries now have four categories:

Starting in 2026, you effectively have four meal categories:

• Production meals on premises
  0% federal deduction, potentially 50% California deduction.
• Occasional overtime reimbursements
  Possibly 50% deductible federally and in California if structured properly.
• Marketing events where you provide wine
  Generally marketing expense or cost of goods sold.
• Business meals you pay for
  Generally 50% deductible.

The credit card description might just say “Restaurant.”

The tax result depends on why you were there and who paid. Classify it correctly now, or you may find yourself picking up the tab for the IRS later.

As always, consult your tax advisor for questions about specific applications of these rules, beginning January 1, 2026.

Most winery owners and their employees hear “extension” and think one thing:

We’re late.

That is not what an extension means. In many cases, filing an extension is a protective move. It keeps options open, even if the return is filed by the original deadline. Here’s why that is important.

What an Extension Really Does

An extension gives additional time to file. It does not give additional time to pay. Any tax due must still be paid by the original deadline to avoid penalties and interest.

So why extend if the return is ready?

Because wineries and the individuals they employ operate in complex environments where information continues to evolve.

• Final K-1s arrive late.
• Corrected 1099s show up. 
• Payroll departments issue corrected W-2s.
• Overtime and tip allocations get adjusted.
• Cost allocations change.
• Entity elections are reconsidered.
• New tax legislation is passed. 

If something important changes after the original filing, flexibility matters.

Superseding Returns vs. Amended Returns

When a timely extension is filed, it preserves the ability to file what is known as a superseding return before the extended deadline. A superseding return replaces the originally filed return during the allowable filing period.  An amended return, however, is a completely separate filing and is designed to revise only certain aspects of the original return.

That distinction matters because many tax elections can only be made on a timely filed or superseding return, but are not allowed on an amended return.  Once the extended deadline passes, some elections are no longer available without special relief.

In practical terms, filing an extension protects the ability to correct or improve a return within the normal filing window instead of being limited to an amended return process later.

Why This Is Especially Important for Partnerships

Many wineries operate as partnerships or LLCs taxed as partnerships.

Under current federal rules, many partnerships cannot simply file a traditional amended return after the due date. Instead, they must use a different correction process that can be more rigid and more complex.

If an extension is filed and an issue is discovered before the extended deadline, a superseding return may still be available. That is often simpler and cleaner than correcting the return later.

What About California?

California updates its conformity to federal tax law periodically through legislation. As of now, California generally conforms to the Internal Revenue Code as of January 1, 2025.

Like the federal system, California allows an automatic extension of time to file, but not an extension of time to pay. It also allows for superseding state returns. 

In practice:

Filing a California extension preserves the ability to correct and refile before the extended deadline.
After the extended deadline passes, changes must be made through an amended return.

For wineries filing both federal and California returns, extending both returns when appropriate keeps the entire filing window open.

Why File an Extension if the Return Is Ready?

Because filing on time and filing safely are not always the same thing.

An extension provides:

• A safety net if better information becomes available
• Flexibility to revise within the filing window
• Protection for time-sensitive elections
• A simpler correction path for partnerships
• Protection against corrected W-2s and revised K-1s
• Alignment between federal and California filings

The Bottom Line

If an extension is recommended, it does not necessarily mean the return is incomplete.  It means flexibility is being preserved in a business environment where winery financial information, both at the entity and individual level, might evolve after the initial filing.

Better to keep the door open than to be locked into an amended return later.

And remember: tax due must still be paid by the original deadline. 

Be sure to consult with your tax advisor for information on how this might apply to your situation. 

Before you dive into the details, here are the nine questions every winery owner should be asking. These will help you focus on key issues and quickly determine if you are getting the information you need to make timely decisions about your winery. 

The Questions

1. Are we capitalizing the right costs into inventory?
2. Are we using the correct method for tax and book inventory?
3. Are we taking advantage of all the tax benefits available to wineries?
4. Do we understand our gross margin by sales channel?
5. How are we tracking wine losses and blends?
6. When are we recognizing revenue and expenses?
7. Does our chart of accounts reflect how a winery operates?
8. Do our systems support accurate, timely reporting?
9. Are we showing this year’s vintage costs on the P&L without overstating expenses?

Full Article

Winery accounting is different, some might even say complicated (or worse.)

If your internal team or outside CPA is treating your winery like a typical product business, you could be missing critical information or making decisions based on the wrong data.

Whether you're preparing for tax season or just trying to get a clearer picture of what's happening in your business, here are nine questions you might want to ask your accountant. You don’t need to know all the answers, but you do need to understand critical decisions that might be impacting your results.

1. Are we capitalizing the right costs into inventory?

Wine inventory is more than what ends up in the bottle. Costs like grapes, winemaking materials, and packaging should be included—but so should a portion of labor and overhead, depending on your accounting method.

Ask: Are we applying consistent rules for what gets capitalized and what gets expensed?

2. Are we using the correct method for tax and book inventory?

Tax rules often allow wineries to use the NIMS method (Non-Incidental Materials and Supplies), which is more limited than full absorption. Book accounting usually requires broader capitalization. For tax purposes, wineries may also elect LIFO or FIFO, each with different impacts on taxable income and inventory valuation.

Ask: Are we clear on which method we are using for tax versus management reporting? Have we considered whether LIFO or FIFO is the right fit for our winery?

3. Are we taking advantage of all the tax benefits available to wineries?

Tax law offers several opportunities that are often missed when teams don’t consider how tax rules apply across the winery lifecycle. From accelerating certain inventory-related deductions to exploring whether farming or winemaking activities qualify for the R&D credit, proactive planning can strengthen cash flow and reduce surprises.

Ask: Have we identified all tax benefits available under current law? Are we accelerating allowable inventory deductions? Have we evaluated whether any winemaking, farming, or production activities might qualify for the R&D credit?

4. Do we understand our gross margin by sales channel?

DTC, distributor, tasting room, wine club—each channel has its own cost profile. Blending them together makes it hard to know what’s really working.

Ask: Can we see margin by channel, not just overall sales? Does our accounting software allow us to track that accurately?

5. How are we tracking wine losses and blends?

Between evaporation, transfers, and blending, volume can move and so can costs. Without a clear system, you can easily lose visibility.

Ask: Do we have controls in place to track gain and loss percentages and where wine is moving?

6. When are we recognizing revenue and expenses?

Revenue should line up with when the wine actually ships—not when the order is placed or charged. Timing matters for both accuracy and cash flow.  Expenses should be recorded when incurred, regardless of when they are paid. 

Ask: Are we properly accounting for prepayments, club orders, and fulfillment timing and vendor and contract terms?

7. Does our chart of accounts reflect how a winery operates?

Generic labels like Supplies or Labor aren’t enough for winery-specific decisions.

Ask: Can we break down costs by area (farming, production, bottling)? Are we tracking by vintage or varietal?

8. Do our systems support accurate, timely reporting?

Good decisions require good data. Waiting until year-end to clean things up makes it too late to course-correct.

Ask: Are we reviewing inventory, margin, and cash flow monthly? Are our tools up to the task?

9. Are we showing this year’s vintage costs on the P&L without overstating expenses?

You want visibility into how much the current vintage is costing—but you don’t want to hit your bottom line with costs that haven’t yet become cost of goods sold.

The solution: Track farming, cellar, and bottling costs on the P&L, then zero them out monthly by transferring those costs into inventory:

• Bulk wine inventory if the wine is still aging

• Bottled wine inventory if bottling occurred during the period

Ask: Do we show current farming and production activity on the P&L (so we can monitor them) but transfer these costs into inventory monthly so profitability isn't distorted?

Conclusion

You don’t need to be an accountant to ask good questions about your winery business. If the answers don’t give you confidence, it may be time to take a closer look at how your accounting is supporting your winery.

Need a second opinion or training for your teams? We help winery owners and their teams gain clarity, improve margins, and make better financial decisions. At the same time, we help winery accountants better communicate financial information to leadership teams.

Geni will be joining a panel of seasoned industry leaders for "Future-Proofing Your Wine Brand: Strategies for Resilience & Long-Term Success" — a session designed to help wineries navigate today's toughest challenges with actionable strategies attendees can implement immediately.

Rising costs. Tightening consumer spending. Slowing sales. The pressures are real, but so are the solutions.

The panel will dive deep into four critical areas: ✓ Financial clarity to protect profitability ✓ Building team strength for long-term stability
✓ Sales optimization to maximize performance ✓ Tech-driven efficiency for smarter decision-making

This isn't about theory — it's about proven approaches from those who've been in the trenches. The speakers will share candid insights on leveraging data, refining sales channels, and positioning for growth through strategic distribution partnerships.

Plus, time is built in for audience engagement so attendees can ask the questions that matter most to their businesses. Participants will leave with a prioritized checklist of battle-tested strategies to put into practice right away.

If you're serious about building resilience in uncertain times, this is a session not to miss.

Register: https://wineindustryexpo.com/. Use promo code GENI2025 for a discount!