What is Farm Credit patronage?
A patronage refund is a way to refund a portion of the interest you paid on your loan. Patronage refunds benefit borrowers by reducing their cost of borrowing. Farm Credit charges competitive rates on its loans/rates comparable to those charged by other lenders for similar loans.
How is Farm Credit patronage calculated?
Patronage is based on the proportion of the average annual balance of your eligible loans to the total average balances of all patronage eligible loans at High Plains Farm Credit.
What is loan patronage?
Patronage reduces your cost of borrowing by returning a portion of our net income to our borrowers based on the proportion of interest paid on their loan and total interest earned by the association.
Are Farm Credit patronage dividends taxable?
Patronage dividend payments are taxable. The Farm Credit East Board will evaluate a variety of business factors, including earnings, growth and economic conditions to determine the appropriate amount of patronage dividends each year.
What is a patronage check?
Patronage Refund: A payment from a cooperative to a. patron from net margins based on quantity or value of business done with or for the patron. The refund may be in cash and/or in the form of a document evidencing the patron’s decision to have the cooperative retain the refund as an investment by the patron.
Is a patronage check taxable?
A “patronage dividend” is essentially a refund issued to those who purchase goods or services from a cooperative, and is calculated based upon the amount that each patron spends at the cooperative in a given taxable year. As a result, this income is not taxed at the corporate level.
What is patronage refund?
Why do cooperatives give patronage refunds?
Tax laws require that co-ops notify each member in writing of their patronage refunds and the total amount allocated to the members account. Reinvestment of patronage refunds is a key way for members to meet their obligation to provide the capital for the co-op in proportion to their use of it.
Where do I report patronage dividends on my taxes?
Per the IRS instructions, patronage dividends and other distributions in boxes 1, 2, 3, and 5 from a cooperative are reported on Schedule C, Schedule F, or Form 4835. You can refer to the recipient instructions for IRS Form 1099-PATR for additional information.
Where can I find MidAtlantic farm credit loans?
MidAtlantic Farm Credit is one of the largest agriculture lenders on the East Coast. As a member-owned co-op, we have historically returned up to 60% of our profits back to our member/borrowers in Delaware, Maryland, Pennsylvania, Virginia and West Virginia.
How does Farm Credit Mid America return patronage?
Returning Patronage is a decision the Farm Credit Mid-America board considers and makes each year. It’s not a guaranteed payment, but rather a return of our earnings that is paid to Patronage-eligible customers of Farm Credit Mid-America, according to board resolution.
How is the payout determined for a patronage program?
Patronage is an annual program. The terms of the program and payout are determined on an annual basis. Your eligibility or loan type or terms may have changed. Future Patronage Programs may or may not include certain customers or loan types, just as the potential exists to not have a patronage payout at all.
When do I get my patronage tax return?
Patronage is generally taxable income. All customers will receive a 1099-PATR in early 2022 for the amount of their patronage received in March 2021. Please consult your tax advisor.
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