Credit Union Tax Exemption Mentioned in Ways and Means Tax Reform Report

A 550-plus page report on tax policy reform created by 11 House Ways and Means working groups and delivered to the Joint Committee on Taxation Monday mentions the credit union tax exemption, as expected.

The report states, “Credit unions are exempt from federal income taxation. The exemption is based on their status as not-for-profit mutual or cooperative organizations (without capital stock) operated for the benefit of their members, who generally must share a common bond.”

The report also notes that the definition of common bond has been expanded so more people can access credit unions.

It continues: “While significant differences between the rules under which credit unions and banks operate have existed in the past, most of those differences have disappeared over time.”

This final sentence on credit unions in the report comes directly from a study from last years of the Clinton administration.

Upon release of the working groups’ report, Credit Union National Association President/CEO Bill Cheney emphasized that preserving the credit union tax exemption is CUNA’s highest priority.

“However,” he added, “the most effective way that we can do that is to ensure that our members and supporters, nationwide, understand the value that credit unions bring to their memberships and consumers at large and how the tax exemption plays a critical role for not-for-profit credit unions.

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