As not-for-profit and member-owned financial cooperatives, credit unions are exempt from paying income tax. This allows credit unions to return revenues back to their members in the form of better rates, lower and fewer fees, and innovative products and services to better serve members. Credit unions pay other taxes, including local and property taxes, as well as payroll taxes. Members also pay taxes on their dividends. Unfortunately, some members in Congress feel that this is not enough, and are seeking to impose a federal income tax on credit unions for the first time.

If credit unions were to pay income tax, your credit union, as well as others, would have to pass their tax payments onto you in the form of higher fees, higher loan rates, and lower savings dividends. Taxing credit unions would not affect the amount of tax you pay as an individual, but would affect how much you pay for credit union loans as well as how much you earn on your deposits. Unfortunately, the big banks and some in Congress want to raise taxes and impose new fees on 96 million credit union members who represent 40% of all Americans, yet represent only 6% of the assets in financial institutions. And, they want to do this despite the fact that credit unions are not-for-profit and meeting their core mission every day.

What Can You Do?

If you like the differences between a bank and a credit union and want those differences to stick around for awhile, then check out www.DontTaxMyCreditUnion.org to find out what you can do to help!

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Until Next Time,

Jessica M.

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