New Voting Poll: Do Credit Unions Know About UBIT?

WEST PALM BEACH, Fla. – Credit unions in some states are starting to learn about what could become a scary acronym for state-chartered credit unions – UBIT – which stands for Unrelated Business Income Tax. It is a tax levied against an exempt entity for income that is unrelated to that entity’s purpose. While it is not a new tax, there is increased emphasis on it by the IRS on state-chartered credit unions in some states, most notably Connecticut, but also including Colorado, Alabama, Texas and California. It does not apply to federal charters, and some believe this could become a major dual chartering issue. It is causing a stir among some credit unions that have been audited because the IRS is calling into question some longtime core CU products as possibly falling under UBIT. They include credit insurance as well as interchange income from debit and credit transactions. This new voting poll question deals with UBIT awareness. It reads as follows: “Are you aware of the Unrelated Business Income Tax, and that the IRS is still determining whether core credit union products such as credit insurance as well as the interchange income from credit and debit cards should be subject to UBIT?” *Yes *No *Was aware of UBIT, but not that credit insurance and interchange income were being looked at by the IRS? Log on to www.cutimes.com to cast your vote.