Federal Tax Exemption

Preserving the credit union federal income tax exemption continues to be our top priority. Credit unions’ member-owned, not-for-profit cooperative status allows the industry to fulfill its mission to put members ahead of the bottom line, and removal of the tax exemption would erode that progress for more than 140 million people. Credit unions stand out as a steady, reliable, consumer-friendly alternative dedicated to improving financial well-being for all. The credit union tax exemption–based on the unique structure–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. It is important to note that credit unions do pay many taxes and fees, among them payroll and property taxes, and the dividends that credit unions pay to their members are taxed as personal income.

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

• Credit unions account for nearly $29 billion in local, state, and federal taxes annually.
• The tax status saves credit union members $13.5 billion annually and non-members see $5.2 billion in annual benefits just from the presence of credit unions in local banking markets.
• The $2 billion that Congress invests in the credit union tax exemption generates more than $208 billion in economic impact every year through personal financial support, small-business lending, job creation, and much more.