The portion of the net income paid out to members is called the patronage dividend and can be paid out in cash or in a note called a written notices of allocation to a member’s internal capital account. The written notice of allocation acts like a statement that tells the member the current value of their internal capital account. Each co-op electing to be taxed under Subchapter T must issue a written notice of allocation each year. This report provides a brief overview of the role and purpose of the Written Notice of Allocation and has sample copies that you can use for your co-op. Click here to download a Word version of this form you can edit.
The Internal Capital Account Excel Model (coming soon) published by the Democracy at Work Institute and ICA can auto generate written notices of allocation based upon your co-op’s specific information.