Amex Sending Out Forms 1099-MISC for Referral Bonuses

American Express changed the referral system back in 2018. As long as you have one American Express card, you can refer people to sign up for any American Express credit card, even if you don’t have that card yourself. You can even refer people to sign up for business cards from a personal card and vice versa. You can even refer yourself and get a signup and a referral bonus at the same time.

Along with that change of how referrals work, American Express is also sending 1099s for those who have received referrals. This hasn’t been the case in the past. But in the last few days many people have received Form 1099-MISC if they earned any kind of referral bonus from their American Express credit cards. I received a couple of forms as well. They are sending 1099s even if you haven’t used the points yet. It’s clearly labeled “Rewards from Refer a Friend Program”.

Even though American Express never sent out 1099s in the past, they have the following fine print in the terms: “The value of the Referral Bonus may be taxable income to you, and we may be required to send you a Form 1099-MISC and file it with the IRS. You are responsible for any federal or state taxes resulting from the Referral Bonus. Please consult your tax advisor if you have questions about the tax treatment of a Referral Bonus.”

Here’s what my form looks like:

amex 1099 referral bonus

If you have referral bonuses from more than one credit card, then you can see the account number at the lower left corner of the form. It shows the full Amex card number.

Point Valuations

While having to pay taxes for referral bonuses is not fun, at least the valuations for the earned points are reasonable. If you card earns cashback, that’s easy, you are taxed on the cashback that you have earned from referral bonuses. For points they have attached the following values:

  • 1 cent per points
    • Membership Rewards points
    • Marriott points
    • Delta SkyMiles
  • 0.67 cents per points
    • Hilton points

Guru’s Wrap-Up

This new development makes referral bonuses a bit less valuable, but you’re still getting pretty good bonuses that go as high as 15,000-20,000 Membership Rewards points. Most people surely value these points way more that just one cent each, so is not all bad. Valuation for Marriott and Hilton is a bit high on these 1099s. Keep in mind that these forms are only being send out for referral bonuses, not for signup bonuses, spending bonuses or any points not earned for referrals.

You can read this post for more information on how taxes work for these bonuses.

HT: DoC

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