People put money into credit unions for several reasons, and one of them is that savings accounts pay dividends. This is interest that the bank pays you for lending them money throughout the year. In the eyes of the IRS, credit union dividends are interest, and should be reported as taxable interest when tax time rolls around.
How to Report
According to the Internal Revenue Service, credit union dividends should be reported as taxable interest on your tax return. If you have earned $1,500 or less in taxable interest throughout the year, you may file your income taxes using the shorter Form 1040EZ. If you have earned over $1,500 in taxable interest, you'll need to use the longer Form 1040 or Form 1040A. Include this amount on line 8a of your tax return. If you had more than $1,500 of taxable interest for the year, you also need to fill out and attach Schedule B.
