Capital Credits

What are capital credits?
Capital credits are a benefit of being a member of a Cooperative.  When you began receiving service from LTC Connect, you became a member of our non-profit Cooperative.  Each year that the Cooperative has a positive margin, this margin is divided up among all active members from that year.  The amount that is allocated to each member is determined by how much the member paid to the Cooperative during that year.  Any positive margin, or income, results in new capital for the Cooperative and each member receives a credit to their allocation.  This is not a credit to your normal monthly service account with the Cooperative, but only used for capital credit purposes.

If the Cooperative has a margin, doesn’t that mean the Cooperative is charging too much for services?
No.  The Cooperative’s revenue comes from various sources beyond just what members pay on a monthly bill.  Less than 40% of Cooperative revenue actually comes from members’ bills.  We receive payments from other service providers and from the FCC’s Connect America Fund.  The Connect America Fund money is provided to help build services in rural areas, but these revenues are still added to our margins, and members receive the benefit of increased allocations because of these revenues.

What is the difference between a capital credit allocation and a capital credit retirement?
A capital credit allocation is how any margin is allocated to members’ capital credit accounts.   When revenue exceeds expenses in any given year, margins are allocated to each member’s capital credit account according to the amount they paid to the Cooperative.  A capital credit retirement happens when the Cooperative’s board determines that enough capital is on hand to meet the current and future needs of the Cooperative membership and authorizes some amount of capital, or money, to be returned to the members.  We normally mail capital credit allocation notices in August.  This allocation notice shows each member, that had service in the previous year, how much margin was allocated to their capital credit account.  The board approves any capital credit retirement in August and those checks are normally mailed in October.  Through 2020, our board has approved over $14 million dollars to be paid to current and previous members through capital credit retirement checks.


Are the capital credit checks received during a general retirement the only way to receive capital credit payments?
No.  Our board currently has an additional retirement policy that applies at the time of death of any member.  If either spouse passes away on a joint membership, the remaining spouse may receive the entire allocated balance.  If a member passes away and is the only person on the membership, the entire allocated balance on the membership may be retired to the estate of the member.  If you are a surviving spouse, or the estate in one of these circumstances, please contact us at or call us at 270-542-4121 or 270-934-4121 for additional information on how to receive a check for these retirements.


I just started service, how long before I get a check?
It depends.  First, you cannot receive a retirement check until you receive an allocation.  Allocations are done on an annual basis.  Retirements are also not guaranteed to happen every year, but our board has made retirements every year since 1993.  We also do not send checks to current members until the amount is at least $10, so if you only had service for a few months it may take some time before your allocations reach levels that would result in checks equaling at least $10.  As you can see, there are lots of factors that affect when checks are sent and the amount of the check.  In general, members that have been with the Cooperative for a longer period have higher allocations and receive larger checks, but it does depend on the amount of business each member does with the Cooperative.


Can a capital credit check be applied toward my LTC Connect bill?
No.  Please do not send an endorsed check through the mail.  Please deposit or cash capital credit checks at a financial institution and provide payment by other means.


Can members cash their capital credit checks at the LTC Connect office?
No.  If you need cash, please cash capital credit checks at a financial institution.


I received a check in the mail, but it’s in the name of a former resident. What should I do?
We send checks to the last known address of former Cooperative members. Do not open the check; please mark “Return to Sender” on the envelope and put it back in the mail.


If I receive a capital credit check in my spouse’s name and he or she is deceased, should I sign it and deposit or cash it?
No.  Please email us at or call us at 270-542-4121 or 270-934-4121 to discuss options and determine if you are eligible for an estate retirement.


How can I be sure to get capital credit statements or retirements if I move out of LTC Connect’s service area?
Keep your address current with us, so we can forward payments to you if capital credits are retired in the future. Please call us at 270-542-4121 or 270-934-4121 to update your information.


Do I have to claim capital credits as income on my tax returns?
Please consult with a tax advisor on this question.  There may be different answers to this question and we cannot give tax advice to members.


How long do members have to cash their checks?
Checks are valid for six months.  If you have a check that is no longer valid, please contact us and we can reissue a new capital credit check within five years of the check being issued.  If a retirement check is not cashed within five years, the amount retired for that member will go back to the Cooperative and be re-allocated to active members as part of the annual allocation process.


How does the capital credit process work for business memberships?
In general, it works the same way.  Businesses receive capital credit allocations based on the amount paid to the Cooperative for that year.  Businesses receive capital credit retirement checks in any general retirement the same as individual members.  If a business is dissolved or otherwise permanently closed, the Cooperative will need legal documentation explaining how the assets of the business were transferred.  This will allow the Cooperative to know how the capital credits should be transferred and how any allocations or retirements should be handled.  Businesses should consider this asset in any dissolution and can contact the Cooperative for information regarding the required paperwork for these situations or for any additional questions.


I am getting a divorce.  Who owns the capital credit allocation?
All LTC Connect memberships associated with a married person are joint memberships unless the individuals have filed a written designation with the Cooperative stating otherwise.  The capital credit allocations are subject to a Court’s ruling in a divorce case, and the Cooperative will re-allocate them upon receiving appropriate legal documentation.  Until that documentation is received, we will continue issuing any allocations and retirements to the membership based on the name of the person or persons on the membership.


I cannot find my last allocation notice.  How can I determine my capital credit allocation balance?
Please call the Cooperative at 270-542-4121 or 270-934-4121 to determine your capital credit allocation balance in the event your notice has been misplaced.


Is there a way to know if I have unclaimed capital credit checks?
Yes.  Please call the Cooperative at 270-542-4121 or 270-934-4121 and speak with any customer service consultant.  A simple check of your membership will reveal any unclaimed capital credit checks less than five years old.


Other questions?
Email us at or call us at 270-542-4121 or 270-934-4121.