Credit Union Tax Status

Preserving the credit union federal income tax status is our top advocacy priority. Credit unions’ member-owned, not-for-profit cooperative status allows the industry to fulfill its people-first mission.  Credit unions stand out as a steady, reliable, consumer-friendly alternative dedicated to improving financial well-being for all. The credit union tax status is a key part of the unique structure that allows credit unions to advance communities across the country and offer a wide range of benefits that help members to save and reach their financial goals.  

While credit unions do not pay federal income tax on profits because those profits are returned back to members in a variety of ways, –and credit unions DO pay many local, state, and federal taxes and fees.  That includes payroll and property taxes, and the dividends that credit unions pay to their members are taxed as personal income.

The credit union tax status provides significant benefits to credit union members and the American economy as a whole.

• Credit unions account for over $36 billion in local, state, and federal taxes annually.
• The tax status saves credit union members $26.9 billion in 2024 (year ending in September) and non-members received $10.5 billion in benefits just from the presence of credit unions in local banking markets.
• The $2.9 billion that Congress invests in the credit union tax status generated more than $297billion in economic impact in 2023 through personal financial support, small-business lending, job creation, and much more.  
• Changing the credit union federal income tax status would place a new tax on the more than 140 million people who use a credit union and put credit unions at risk.  

Utilize our Resource Library for handouts and briefing materials on this and other advocacy issues.