Troopers

I haven't received a 1099 yet. Has anyone here received a 1099?

Happy

I suggest those who are interested to follow up on the comment section of DoC's article.

For those who claim sign up bonuses are not subj to 1099, apparently if the sign up bonuses required tier spend to earn, it may very well be taxable!

Someone reported getting a $1000 1099 on his 100K Marriott credit card sign up bonus.That was what he earned, OUT OF SPEND. The Marriott pts are grossly overvalued at 0.01 per pt. Even AMEX does not have the insanity to overvalue the cobrand pts being the same as the Membership Reward pts.

Not to mention the $500 valuation fiasco on 500 bonus pts earned from signing up a paperless statement, that has shown on the 1099s received by those who got the 500 bonus pts.

Southwest airlines CC retention offers are also reported on 1099.

The worst part? people are getting Indian call center where the reps have absolutely NO CLUE on US Taxes, naturally. When people tried to reach higher level, they were told to call customer service number at the back of their cards!!!

Financial institutions make mistakes on 1099s every year, but virtually all of them, their support telephone lines are manned by US centers and not requiring impacted customers to jump thru hoops to get an amended 1099 issued.

In the comment section people are reporting spending HOURS talking to multitude of Indian reps without getting anywhere. Really pathetic.

At least DoC has tweeted Chase - probably the first time Chase finally learns about how messy this has become - all because of the outsourcing to clueless Indian software firm to handle the 1099's.

Happy

Someone received a $1000 1099 on his 100K Marriott card that the bonus was earned by SPENDING.

All the armchair speculations notwithstanding, nobody has a privy on whether Chase (and Amex) have received IRS private rulings, or being audited by IRS on their deduction of expenditures in their CC businesses - that leads to IRS tell them if you deduct those bonuses and retention offers as expenditures, then you need to report these as Misc Income received by the cardholders as well. Who knows?

The more real DPs surface, the bigger scope has become - so what would be the BA cards that you earn a bonus for each milestone spend? If the 100K Marriott is taxable, how about the BA tier bonuses, both require spending to earn?

On top of that, the retention offers often are just offset the AF billed, sometimes not even in full - but these are reported on the 1099s for both personal and business cards by Chase. I do not see any DP AMEX are treating retention offers being taxable income.

It is getting more and more obvious that Chase outsourced 1099 handling firm with the software used, is seriously flawed.

Happy

This is what the RUN AROUND people are getting - Indian pushed caller to customer service which said 1099 was wrong after reviewing account, pushed caller back to Indian. Indian again pushed caller back to CS... after 2 iterations, the brilliant Indian said the amount was right, because "it was on the form."...
Eventually a dispute was opened, said it would take 2 to 3 weeks before someone would review it...

Extremely ill-prepared on the massively sent out 1099s. Hardly worth the few hundreds overage after tax with the headache dealing erroneous 1099s and pathetic customer services. .................................................. .................................................. ..........

restrictonthehanger

I got one in the mail yesterday that had both a signup bonus and a referral bonus listed. I'm going to request removal of the signup bonus, since it did have a spending requirement attached

mia

A 1099 does not create a tax liability. Absence of a 1099 does not eliminate tax liability. Banks make errors, they do not change the tax laws. If new account bonuses were taxable everyone would receive a 1099, but the fact that most of us have not suggests that there is an error in the software that includes new account bonuses when some other condition is also met. The nationality of the employees at Chase's call center tells us nothing about where the data was processed.

Chase offered an upgrade bonus on Marriott cards. Did those include a spend requirement? Have they been reported?

An error on a 1099 is a nuisance for those who already use a professional tax preparer, but it's more of a problem for those who do their own returns.

To encourage existing cardholders to use the card, rather than letting it sit idle while generating referral bonuses.

It used to be that retention bonuses had no spending requirement, but now a spending requirement is common. This transition did not seem to have any connection to tax policy, but I could have missed it.

thunderlounge

That’s what I was getting at. Add a trivial spend requirement to it and then it could be treated as a rebate.

(Notwithstanding private IRS rulings or other crapola. Just speculating.)

rrgg

OK. That's a good point. I don't think it contradicts what I've written though. The way the referral bonus works with Citi, the 10,000 points aren't earned until you also spend something, so it's plausible that the bonus of 10,000 is treated as a rebate just like the base 500.

josephstern

So if Chase forfeited your points, you'd be able to take a tax loss now?

Happy

Seems logical, isn't it?

On top of that, ain't the T&Cs of all banks said the points are not your properties?

When Citi sends out its 1099, despite the initial blunder in way-overvalued the AA miles at 2.5c, at least it has proper programming subsequently to correctly identify that only the bonuses from banking products are reported as taxable income, as well as only report it when the points are REDEEMED - it is until then, those become YOURS and benefit you.

Despite how we like to blast how poor Citi IT is, seems to me the outsourced Chase IT at least part of it, is much worse, in the sense that there is NO thorough check on the logic and correctness of the outcome it produced.

mroseman13

I just received a 1099. $600 on my Chase Freedom and $5 on my Marriott card. I don't recall referring anyone to the CF, so could it be from the 5% bonuses that I was able to max out on all of last year? And I took the 50k point offer to upgrade to the latest Marriott card, but that's an odd value to only put $5 on my form. I sent a secure message and will hopefully get more information, but that seems unlikely from this thread.

Happy

While this is not a good news for you but it is a "good to know" PROOF for the question asked about whether anyone who took an upgrade on the Marriott card last year, received a 1099.

Your DP is the answer despite the screwed up reporting on the 1099.

Did you have to make spend in order to earn the 50K Marriott pts? even just 1 purchase? If so, that also debunk the assumption that if some task is required to perform, that makes a bonus not taxable (therefore not reportable).

I have seen an image of a 1099, shows $10 reported with $2.47 Federal withheld tax. The recipient of that 1099 could not think of anything other than a one time $10 statement credit on signing up a Quick Pay.

With the widespread mis-reportings on the 1099s, chances for Chase to issue amended 1099s seem high - but that would be many weeks from now as after all, they need to get whoever the software firm who bungled this to redo the program. My hunch is, said provider of the software is NOT in US - true, whatever nationalities the programmers are do not matter - what matter are 1) They know what they are doing, i.e. understand how US tax laws operate, or at least have higher ups know the criteria to do the drag net, 2) There needs to have QA (Quality Assurance) team to check the final product before putting it to production run, i.e. generating those 1099s to be sent out. It is obviously there is NO QA Involved - otherwise a 500 UR pts would not be classified as $500 income by confusing penny with dollar!

Please do update the thread on what SM response you eventually get.

Happy

Reddit thread has some new DPs

https://www.reddit.com/r/churning/co...read/?sort=new
DirectHits

Critterlynn

So what happens to all the people who have to file an amended return, or have to wait until they get an amended 1099 to file?

Often1

As is made clear above, the existence of a 1099 does not create a tax liability. If you receive an incorrect 1099, you may determine what the proper income is, explain the reasoning and file based on your reasoned explanation. If you are unreasonable, you are, of course, risking penalties and interest.

Alternatively, you may wait for an amended 1099 or file an amended 1040 when the new 1099 arrives.