Based on the annual financial results of the organization, Moose Jaw Co-op distributes profits back to each member through equity and cash back. The total amount of profit allocated to each member is based on the value of the products and services purchased by the member, known as patronage, throughout the year.
The cash portion of the allocation is paid out in the form of a cheque. The equity portion of the allocation is retained by the co-operative. Members who have earned cash back of at least $20.00 will receive a cheque and an equity statement.
As required by Canada Revenue Agency, members who earn a total allocation (equity and cash back) of $100 or more will be assessed a 15% withholding tax on the amount of their allocation over $100, that the co-operative remits on the members’ behalf, and a T4A will be issued in February. If the purchases are for personal use, they are not taxable, and the withholding tax can be claimed back on your tax return. If your purchases are for business use, the allocation is taxable and the tax withheld can be included in your income tax calculation. Instructions for including the T4A on your income tax return is provided on the back of your T4A.
An application for withdrawal of equity is typically approved for the following reasons:
• When a member moves out of the trading area as defined by the co-operative’s Board of Directors.
• When a member reaches a certain age (70) determined by the co-operative’s Board of Directors.
• When the Equity is paid out to your estate.
Click the links below to access an explanation of your equity statement, an explanation of your T4A, or one of the applications for withdrawal of equity (Move Away, Over Age 70, Estate):