CUNA to Congress: Credit Unions Taxed Differently by Design
FOR IMMEDIATE RELEASE
April 2, 2019
Credit Union National Association (CUNA) Chief Advocacy Officer Ryan Donovan wrote to Capitol Hill today to further emphasize the nonprofit model of credit unions as financial cooperatives.
“Taxing credit unions would yield enough cash to run the government for about 4 hours. That’s not a lot of money when you compare it to the nearly $30 billion tax break banks got in 2018 alone from the Tax Cuts and Jobs Act,” Chief Advocacy Officer Ryan Donovan wrote.
Credit unions are exempt from federal income tax because of their structure as not-for-profit financial cooperatives and their mission to promote thrift and provide access to credit for provident purposes. CUNA maintains that the credit unions' tax status does not create an unfair market advantage.
The banking lobby vigorously opposes credit unions' federal income tax-exempt status. Contrary to banking arguments, credit unions do pay taxes — payroll taxes, real estate taxes, and some other property taxes. In addition, dividends paid to credit union members are taxed as ordinary income.
Congress bases the credit union tax exemption on credit unions' structure as not-for-profit financial cooperatives and their mission to promote thrift and provide access to credit for provident purposes. It is one of the best investments that the government makes in its citizens.
Credit Union National Association (CUNA) is the only national association that advocates on behalf of all of America’s credit unions, which are owned by 115 million consumer members. CUNA, along with its network of affiliated state credit union leagues, delivers unwavering advocacy, continuous professional growth and operational confidence to protect the best interests of all credit unions. For more information about CUNA, visit cuna.org. To find your nearest credit union, visit YourMoneyFurther.com.