Capital Credits FAQ

What happens if the member is deceased or a member business closes?

SVEC does not retire the remaining capital credits in lump sums. The capital credits can be transferred to up to 3 beneficiaries who will continue to receive the capital credits retirement until the capital credits are exhausted and the member no longer has an ownership stake in the cooperative.

Are capital credits retired every year?

At the end of each year, the board of SVEC determines if the cooperative is in a financial position to retire capital credits. There are certain requirements the cooperative must meet before the board can consider retiring capital credits. Fortunately, for more than the past 20 years, the cooperative has been able to retire capital credits to the membership every year.

Are payments for capital credit retirements taxable?

SVEC’s residential members do not need to report payments of retired capital credits as income when they file their taxes. Commercial members, however, should consult their tax adviser regarding the taxable nature of their capital credits.