What are capital credits?
Interstate Telecommunications Cooperative, Inc. (ITC) allocates patronage sourced margins to its members of the Cooperative. These allocations are known as capital credits. At the end of each fiscal year the amount of capital, if any, so furnished by each member is clearly reflected and credited in an appropriate record to the capital account of each member.
Who qualifies to receive capital credits?
Any person, association, corporation, firm, partnership or body politic or subdivision thereof will become a member of Interstate Telecommunications Cooperative, Inc, upon purchasing telecommunications services, informational services, or cable television services from the Cooperative. See Section 1 of Company Bylaws in the front section of the ITC Phone Book for additional terms and conditions.
When are capital credits distributed to members?
Distribution of capital credits is under the discretion of ITC’s Board of Directors. Members are notified in the company newsletter, The Bell Ringer.
Capital Credits and Taxes
Every year members of telephone cooperatives receive notice of the patronage credits they earned the previous year. Current tax laws say that no part of the capital credits allocated to cooperative patrons is subject to taxation until actually paid in cash. When patrons receive cash for allocated credits, they are only subject to taxation to the extent that the payment for services was deducted on the income tax return for the year the credit was allocated. The non-business portion is not subject to taxation. Please consult your tax advisor for more information.