Yep, it’s that season again. Every year there’s at least one story of a bank doing something wonky with their 1099s. This year the honors go to Bank of America who are apparently sending out 1099-MISC for credit card signup bonus earn.
Reader L. sent me over a picture of a 1099 they received from Bank of America for $650. It’s clear on the form that it’s coming for Air France/KLM card. Apparently, they consider the 50,000 points and $150 earned from the card signup (and $2,000 minimum spend) to be taxable. I’ve never heard of any bank considering credit card signup bonuses to be taxable since the reward is typically considered a rebate on the spend. Historically, there have been cases of 1099s for points earned from bank openings, but never from credit card signup bonuses.
We don’t yet know if the 1099 is only coming for the Air France card or for all Bank of America signup bonuses. Please let us know in the comments below if you get a 1099 and on which card.
Related: My Thoughts on Taxes for Miles, Points, and Cash Back
View Comments (158)
Could not find a similar post for Capital One, so posting here.. please redirect me if I missed it.
Got my 1099s from Capital One. I had 50K in referral bonuses, which I knew would be taxable, and that is why I stopped at 2. But they still sent me 2 1099s for 600+ on one account and 100 on another. Filed a dispute... we will see where it goes (my guess nowhere).
I reviewed my transactions, and my only meaningful guess is that they added $100 Global Entry Credit to both cards. Still have no idea where some change on 600+ came from. But the account with $100 1099 only had the AF waived 95 and Global Entry credit 100. The other one had GE as well.. So my guess they are adding it. Since they did not add $300 portal credit and $200 AirBnB credit, I hope that $100 is a mistake...
At this point even if I am successful battling them the best I can hope for is a correction for one 1099 to $0 and correction for another to the actual $500.. still sucks.
CapOne is hard to talk to as you get general CS who does not know anything and do not make any sense. The managers are better, at least they understand my point (When I requested an item list how they came up with those numbers). Not even fighting it yet, just trying to get information and it is very hard. They are chatting or calling their back end while you are on hold.
Well.. good luck to all of us :)
P.S. @will @chucksithe , this may worth a separate post in hope to get more data points.
I'll add a note https://www.doctorofcredit.com/which-banks-send-out-tax-form-1099-discussion-post-for-2022-tax-forms/
Oh, that post you mentioned makes more sense for my comment. Should I copy paste this one there? Or just reference it?
And I will post an update when I hear from their dispute team.. so I need to make sure that is what they are reporting on 1099s, but I am almost sure, as I did not have other credits for that amount.
Bank of America just sent me and p2 1099 for Bank of America Premium Reward sign up bonus of 50,000 and other 40,000 points earned from spending.
This is ridiculous!! Anyone know how to dispute this? CPPB ? BBB or write letter to their executives?
so did you call to complain what they say?
Has anyone been successful contesting those sign up bonus 1099s? It has been always treated as a "rebate" by all banks. I can see reporting referral bonuses, or courtesy credits, but SUBs?
Can we have a post that specifically mentions with card issuers give 1099-MISC for credit card sign up bonuses, referral bonuses, and other promotional bonuses? Would be really helpful to know what to expect, especially now that tax season is here.
These might help https://www.doctorofcredit.com/which-banks-send-out-1099s-for-account-bonuses/
https://www.doctorofcredit.com/thoughts-taxes-miles-points-cash-back/
We got $500 1099 INT for our Bank of America Business Checking bonuses, but nothing for the Alaska Business 40K + +250 offer. So, this issues appears to be YMMV. One has to wonder if it is a mistake by BoA.
So, I just got 300 in bank interest (yes taxable) and a 200$ credit card sign up with 1k spend. Sounds like I better just avoid going for that 2nd BOA credit card this year then. Don't mind paying it on the bank interest but the credit card bonus is BS. Probably wouldn't get it anyway!
In my USBank checking account, they charge $14.95 fee per month, and then rebate the fee since I have one of their credit cards. These appear as two separate transactions on each statement -$14.95 and +$14.95. It's not a free account. There's a fee and a rebate.
So, even if they don't issue a 1099, is this $14.95 monthly income reportable and taxable. It doesn't seem that different the situations where you would think that positive and negative transactions would net out, but they don't and you have to pay tax on the "income" ones.
I see your point... i.e. Amex when give you a credit for the annual fee will consider that credit as "free money" and therefore taxable.. if together with referral bounces, those AF credits hit $600+ you will get the 1099 for them. Although look similar, the waiver of a banking monthly fee is different (I think).
With Amex it is considered as a one-time courtesy credit.. with the Bank, it is stated in their terms and conditions that the monthly fee is officially waived (not given back to you) if you meet their criteria.. so the credit is their internal way of waiving it. I think you are totally safe with bank account monthly fee waivers (credits).
US Bank waives the fee, it is not a rebate and it certainly isn't taxable income. Sure there is a line item in your statement that shows plus and minus but their account opening docs clearly say "No monthly maintenance fee with..." and then the different options to avoid the fee depending on account type including credit card for gold.
Banks won't issue you 1099s for fees, its their income lol
No, I mean for the rebate. That's income to me. It's phantom income - they charge me $14.95 then immediately rebate it back - so it would seem quite ludicrous to tax it, but that's the point of the example.
If the banks send you nothing, why bother?
Why bother what?!? It's a hypothetical to bring up a point.
Yep. What's next 1099s for target red card coupons? Probably shouldn't give them ideas....
no
i just got a 1099-MISC from Chase for $600. quite sure it relates to the 60k UR bonus I received from CSR in 2020...this sucks lol. so now i have to pick this up on my tax return right? no exceptions?
is there any possibility Chase is going to change their mind on the forms and issue some corrected statement saying they didn't intend for it to be income to everyone? or is that just wishful thinking now..
How did you get 60k UR bonus from CSR? It's never been that level. Or was it CSP? Either way, it is a DP that needs to be clarified (and others have posted counter-DPs).
Are you sure its not actually the 600 for the Chase checking/savings bonus?
They give 1099-INT for that.
Are you sure you didn't have any referrals, retention offers or bonuses that didnt require spending? I got my chase 1099 yesterday and it only had referrals on it, none of the other bonuses I received.
does it say anywhere on the 1099 that it was for referrals, or you just know that? i dont believe i had any referrals so pretty sure they are dinging me on my CSR signup bonus
I know, it doesn't say what it's for. It should say what account it's for then check your account statements for that account to see but with $600 there are probably more than one account listed. You could also call chase and ask.
Got the same 1099 for P2. $600 for 3 ink referrals and $5 for signing up for e-statements for P2 on a personal card. :/ Oh well it was free money anyway.
So tired of companies abusing 1099s...
It is illegal, opening bonus is spending related, BoA must be fined with penalty.