Beyond the preservation of tax status, several provisions in the legislation could affect credit union operations and their members:

Qualified Business Income Deduction: The bill would make the TCJA’s 20% deduction for pass-through income permanent and increase it to 23%. This could benefit certain CUSOs, depending on their corporate structure and eligibility under Section 199A.
Estate and Gift Tax Exemption: The bill would extend the increased exemption amount to $15 million, which could influence wealth management offerings at larger credit unions and support estate planning services for high-net-worth members.
Savers Credit and Retirement Enhancements: Provisions supporting ABLE accounts and workplace retirement savings could align with credit unions’ financial wellness and planning initiatives, particularly for underserved communities and individuals with disabilities.
New Deductions for Overtime and Tip Income: Workers who earn overtime or rely on tips would be eligible for tax deductions, potentially improving the financial standing of many lower-income credit union members and increasing demand for savings tools and credit products.
Itemized Deduction Cap: The bill proposed to cap the tax benefit of itemized deductions, including those for mortgage interest and charitable contributions — two areas often linked to credit union lending and community support programs.

As the reconciliation process continues, credit union advocates plan to stay engaged. “This legislation contains numerous provisions that intersect with our mission of member service and financial inclusion,” DCUC President/CEO Anthony Hernandez said. “We’ll continue working to ensure credit unions are protected and positioned to thrive.”

Instant Insights /

House Tax Bill Includes Key Provisions That Could Affect Credit Unions

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