Capital Credits

Capital credits are each member’s share of margins in proportion to the amount paid for TCT services. This benefit represents member equity or ownership in the cooperative. Cooperative equity is owned by the members who also receive service. Capital credits are a benefit received for being a member of the cooperative.

Terms and Definitions: The following terms and definitions are subject to TCT’s bylaws which state, the Board shall determine that the financial condition of the Cooperative will not be impaired.

General Retirement – A retirement is the amount members receive back as a capital credits refund. It is a percentage of the member’s total capital credits balance. The percentage to retire is decided upon annually, based upon the financial needs of the cooperative.

Allocation – Allocation is the money added to the capital credits account of the members who have an active landline telephone service for a specific year. The allocation amount is determined by company profits, which change every year.

Capital Credits Discount program – A voluntary program that eligible members may choose to participate in to receive their capital credits at a discounted amount.

Distribution – Distribution is the Board approved payout for a portion or percentage of the capital credits that have been earned by members.

Estate Retirement – The retirement of an estate is the disbursement of all remaining capital credits accumulation of the member to the member’s estate. Estates will only be retired in full if the Board deems that the retirement of the estate will not financially impair the cooperative.

 

CAPITAL CREDITS | FREQUENTLY ASKED QUESTIONS

  • Q. Why can’t I have my capital credits now?

    A: Capital credits are used to finance capital improvement and expansion needs before applying for additional loans and paying interest on those borrowed funds. Improvement and expansion may include fiber optics, software, ONT’s, servers, electronics, vehicles, plows or other equipment that provide service. Capital credits are used appropriately to keep the cost of services as low as possible while maintaining a high quality of service.

  • Q. Who makes the decision to refund?

    A: The decision to make a refund is made by the Board of TCT on an annual basis and is based upon the financial condition of the cooperative.

  • Q. What happens to the capital credits of members who move out of the service area?

    A: Capital credits assigned to members will remain in their name whether they are a current member or not. However, if they fail to maintain a current address and appropriate attempts to refund are returned as undeliverable, the capital credits associated with that refund are forfeited.

  • Q: Can members use their capital credits to pay their bill?

    A: No, however any outstanding bad debt owed to TCT will be paid prior to the member receiving payment of their capital credits.

  • Q. What happens to capital credits if a member dies?

    A: If a member, or former member dies, any remaining capital credits accumulation is a part of their estate and can be assigned to their heirs or beneficiaries. Estates will only be retired in full if the Board deems that the retirement of the estate will not financially impair the cooperative.

  • Q: How do I apply for the capital credits of a deceased member?

    A: In the case of a single membership, all capital credits are payable to the estate at the time of death. The administrator of the estate should report the death to the business office by calling 800-362-2576. In case of a joint membership, a change in the membership name must be made to ensure future capital credits can be paid to the surviving spouse/member.

  • Q: What happens if a business dissolves?

    A: Capital Credits can be paid out once approved by the Board, however the cooperative must receive proof that the Tax ID number of the business has been returned to the IRS. In the event the businesses is a sole proprietorship, using the owner’s social security number, the capital credits may be transferred to the member’s personal account.

  • Q: Are capital credits considered taxable?

    A: Members are advised to consult their tax attorney.

  • Q: What happens in case of divorce?

    A: Capital credits checks are made payable to the member whose name is on the membership account, regardless of who pays the bill. If the situation is otherwise, TCT must be notified and provided with supporting documentation (i.e. a divorce decree or court order) as to how the capital credits should be divided. Capital credits retirement in these cases are still subject to standard capital credits payout criteria.

 

CAPITAL CREDITS DISCOUNT PROGRAM | FREQUENTLY ASKED QUESTIONS

Capital Credits Discount program – A voluntary program that eligible members may choose to participate in to receive their capital credits at a discounted amount.

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