Viewfromthewing heard in a statement from Capital One that they count TSA Precheck/Global Entry credits in your form 1099-MISC toward the $600 threshold. Here was the official statement:
Required reportable payments include certain credits or gifts given to customers including the TSA Pre/Global Entry statement credit and courtesy credits via customer servicing; reportable payments must equal or exceed a total of $600 within a year for a customer to be eligible to receive the 1099-MISC form.
Just yesterday reader VL noticed their TSA credit counting on the 1099 form, and I dutifully added it as a note to our 1099 thread. With the official confirmation I thought it worth a dedicated post as something for everyone to keep in mind.
Referrals count on the 1099 at around 1 cent-per-point. Capital One has some weird math whereby they count the points value at slightly more than 1 cent ($0.010029), and so you’ll see some odd numbers on the 1099.
Reports are that the $300 Venture X credit is also not counting on the 1099. And the $200 Airbnb/vacation credit, as well as shopping portal credits, should not count on the 1099.
We haven’t heard of any other bank counting the TSA/GE credit credit in a form 1099-MISC. My thought would be that it’s just rebating a charge and would not constitute income. Counting referrals as income is common with all banks.
Again, important: Capital One is only sending out the form 1099-MISC when you earned more than $600 in a calendar year. For most people who just get the $100 TSA/GE credit and $100 on their Venture X card anniversary, you should fall under the reporting threshold and would not have to worry about a form 1099. But if you also referred some friends for the 25,000 points bonus, that might push you above the $600 reporting threshold.
As always, keep in mind, receiving or not receiving a form 1099 does not change in any way whether there is any actual tax liability. It’s just a reporting mechanism. However, by default, most people will just report any income for which they did get a form 1099. And most people won’t report things like small statement credits from banks, especially given that all other banks don’t seem to find them reportable. (I suppose they feel it’s like a rebate and is not taxable, but please consult your own tax advisor.) It is possible to adjust the income on a 1099, essentially disputing the banks calculation and only paying taxes on the portion you agree with.
i spent several hours on the phone with several Capital One reps & supervisors trying to determine exactly how they calculated the $601.45 on my 1099-MISC. They were, of course, useless.
Thankfully DOC is always on point and I quickly found the $0.010029 piece of information.
We (consumers) likely have zero recourse. Cap1 also said that they don’t have to provide the details of how they arrived at the taxable amounts. But they did provide a paper mailing address to submit my request for details, in case anyone needs it:
ATTN: 63001-0125
15000 CAPITAL ONE DR
RICHMOND, VA 23238
Can we start deducting all spend on credit card as expense which was spent towards generating these 1099 misc income?
Cry me a river. Those who got the 1099 also did do as they referred other. If you have been in the credit card game for a while, you should know this would be happening so don’t act surprised, you had it coming. C1 referring to the TSA precheck is a different story but those getting the form based on referrals shouldn’t be complaining, just stop referring, the easy solution.
Corrected.. I think I misunderstood your point.
Whoever made referrals for more than 60K points, sure, should expect 1099, and may be they did so intentionally (may be even after paying taxes on $1K they are better off than stopping at 50K of referrals) .
I am in this game for a while, and that is why I keep track of all my referrals making sure I do not hit 60K on any single issuer. I also add freebies (if an annual fee gets not waived, but just a courtesy credit is issued, or any other courtesy credit is given). All freebies + referrals should be kept under $600. I did 2 referrals and stopped for 2022, left the other 2 for 2023. Who would knew that GE credits would be added.. No other banks do that, and lots was said here why they should have not been (so I am not going to repeat it here). If I knew, I would have used them on my Chase or Amex instead … as a matter of fact, I was giving them away to the friends and family members who did not have them…
This is a cost of doing business for me. Even with paying taxes on those $700 I am better off with 50K extra CapOne points. I would not buy them for $300, but it covers the taxes I will pay anyway.
Just make a note of it, and expect other sorts of credits to be counted by Cap1 in the future. At least expect that this may happen.
Good luck.
Thank goodness that they did this. The IRS was missing out on tens of dollars of taxes due to Capital One’s historical non-reporting
Individuals should request from Capital One a schedule of income comprising the 1099. Provide that schedule to your tax return preparer. Tell your tax return preparer to EXCLUDE income allocated to statement credits associated with a purchase (such as TSA pre-check credit or dining credit, etc.) and to include a footnote on your tax return references their non-taxable character under TC Memo 2021-23 (Docket Number 13080-17). This is called a “disclosed position.” If you’re right, you’ve saved yourself the tax. If you’re wrong and tax is due, the disclosed position will allow you to avoid a penalty on the underpayment.
Oh look at that, a $100 business expense on schedule C for my (legit) Sole Proprietorship. Global Entry $100 since I needed it for traveling! $100 income, $100 expense. Done. 🙂
This is almost as stupid as voting for DUMP
Why would you let DUMP occupy space in your head? Derangement syndrome indeed.
Are C1 1099s only showing up by snail mail, or is there a way to see if you’re getting one online?
Future prediction for 2026:
Cards from Discover, Chase Amazon, AMEX, and Citi than offer 5% cash/point back in select retail categories…
will start issuing you a 1099-MISC in 2027 if your savings or discounts through those categories exceed >= $600.
Credit card cash-back rewards are not taxable. The IRS treats cash-back rewards as a rebate on spending and not as income, so you aren’t required to pay income tax on these rewards.
“you aren’t required to pay income tax on these rewards”
Paypal’s 1099s have entered the chat….
Who’s in your wallet?