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Federated Co-ops, Inc. Patronage Q & A
How do I begin earning Patronage?
When you open your account you are required to complete the customer information and the Substitute W-9/Patronage Consent form. We must have your Social Security number to pay Patronage so it can be reported correctly on the 1099PATR form to the IRS.
Why am I receiving this payment?
Federated Co-ops is a Cooperative, so when profits are earned they are paid back to the customers who have done business in the prior year.
How is the payment calculated?
It is based upon the yearly earnings of the Cooperative, and the amount that you purchased during the previous calendar year.
Will I receive a Patronage payment every year?
You may not receive a payment every year, the rate varies from year to year based upon the Cooperative's earnings, the minimum check amount, and the amount of your purchases.
Does my Patronage equity earn interest?
Patronage equity is non interest bearing.
Why did I receive a 1099PATR with my check and why is it different than my check amount?
The IRS requires the 1099PATR to show the total refund for the year regardless of the cash amount paid. You should check with your Tax Preparer to determine if the refund is taxable in your situation.
What happens to my Equity if I discontinue business with the Cooperative?
All equity earned remains in your name until you reach the Board's designated retirement age of 70, you must make a request to the Board when you reach the required age. Be sure the Cooperative always has your current mailing address to ensure all records are up to date.
What happens to my Equity if I die?
Under the Board's current policy all equity earned is paid out to the Estate.
How do I read my Patronage Payment?
"Total Sales": The dollar amount you spent for the previous Calendar year.
"Calculated Refund": This is the Total refund based on your Total Sales(purchases).
"Equity": This is the equity amount being added to your Equity account.
"New Equity Balance": This the total amount in your Equity account, for all years.
"Cash Refund": This is the amount of Cash paid.
"Less FWT": If your Social Security number was not provided this is the Federal Withholding.
"Check Amount": This is the amount the check is for.