Are payments of patronage dividends taxable?
If the cost of the service was not taken as a deduction on your tax return when the service was received, the return of the excess paid for the service (patronage dividend payments) is not taxable income. However, most businesses claim telephone service provided to the business as a business expense and therefore would have to claim patronage dividends as income. The cooperative cannot advise its members on tax issues. You should check with your tax advisor.
