I wrote last week that Chase was sending out Form 1099-INT for Sapphire Banking bonuses that were earned last year. That was expected. But now it looks like Chase is following the footsteps of American Express and sending out 1099s for referral bonuses as well, and just about everything else besides signup bonuses.
First referral bonuses. Chase is sending out Form 1099 to anyone who received more than $600 or 60,000 Ultimate Rewards points in referral bonuses during 2018. Ultimate Rewards points are being valued at 1 cent each which is very reasonable. The $600 threshold is not per card, but per SSN. So if you got back a total of $600 or more among several cards, you should expect 1099s for each card. We’ve seen Chase do this in the past, but they backtracked. However, I doubt that will happen this year since American Express is doing the same thing.
But as mentioned above, Chase is not stopping at referrals. DoC reports that many people are seeing 1099s for a variety of bonuses. These are smaller bonuses that are being issued 1099s for those who again have a total of $600 or more in bonuses. Here’s some examples of what you might expect a 1099 for:
- Paperless statements bonus for $5 or $10 (read more about the bonus here)
- Retention bonuses, likely those which didn’t require any spending
- Credit card upgrade bonus
- Best Buy special offer bonus
The last two reports might need some confirmation. There’s also reports of Chase messing up valuation on some 500 Ultimate Rewards bonuses and sending a 1099 for $500.
This is a bit strange. As one comment on r/churning notes, the Ultimate Rewards Program Agreement says:
- Points aren’t your property and have no cash value
But then continues to say that “Your participation in the program may result in the receipt of taxable income from Chase and we may be required to send to you, and file with the IRS, a Form 1099-MISC (miscellaneous income)”. While I’m no accountant, that doesn’t sound right for something that is not yours and has no value.
These 1099 will lower those bonuses a bit. The good news in all this is that Ultimate Rewards points are being valued at 1 cent each and most people will get much better value than that. You can read this post for more information on how taxes work for these bonuses.
Let me know if you received a 1099 for any of the reasons listed above, or anything else that wasn’t mentioned here.