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Capital Credits

As a not-for-profit organization, we allocate part of the margins over and above the cost of operation to members in the form of capital credits. Years of service and the amount of electricity an individual member uses determine the amount of credit that a member receives. Between the time capital credits are assigned and the time they are refunded to you, the money is used by the cooperative to maintain, improve and ensure dependable service.

Are your capital credits taxable?

Under current law, no part of the capital credits allocated to you by Roseau Electric Cooperative is taxable until actually paid in cash. When you actually receive a check through a capital credit retirement, it is subject to taxation only to the extent that your electric costs were deducted as an expense on your income tax return for the year the credit was allocated.

For example, a farm or other business claiming 75 percent business use of their electric costs would have to include 75 percent of the cash payment for the capital credits when received as income. The non-business portion is not subject to taxation.

Wage earners who take no deductions for electric costs would not have to show any of the cash retirement as income.

 
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Roseau Electric Cooperative, Inc., 1107 3rd Street NE, Roseau, MN 56751
Phone: 218-463-1543 or 888-847-8840 E-mail: rec@roseauelectric.com

Copyright © 2002-2015 Roseau Electric Cooperative, Inc. All rights reserved.