[A previous version of this article stated that Amex is valuing Hilton points at 1.25 cents. The article has been updated and edited with the correct number of .67 cents – see this post for more information on that point.]
American Express is sending out Form 1099-MISC for referral bonuses earned during the calendar year 2018. Amex values Hilton points at .67 cents per point, and all other points at 1 cent per point; that includes things like Membership Rewards, Delta, SPG, and Marriott points.
You’ll get a separate Form 1099 for each card you referred from, I believe. Apparently, these are being sent out even for those who did not get $600 total. ($600 is the threshold where they are required to send out the form – assuming this qualifies as a cash value.) They are sending the forms even for points which were not yet used as well.
Note: Only referral bonuses are getting 1099s, not signup bonuses or any other sort of bonus, regardless of how it was redeemed.
In the Amex terms, it states:Â “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.”
You can declare the value of the points different from what the 1099 stated. Consult your tax professional on how to go about making this adjustment. Some discussion about adjusting can be found on Reddit here, including the idea of deducting the income by the cost of the annual fee on the card since that expense was necessary to get this earned income.
Citibank sends out a 1099 for ThankYou points earned from bank bonuses (only), but they evidently send it out based on the year the points are redeemed. This makes sense: anyone who reads the fine print of points programs will see text about how points have no cash value, yada, yada. Indeed, there’s a high number of points which go unredeemed. Also, Citi will value your 1099 based on the actual value you received from the points, not an arbitrary number.
Chase did the same thing in 2017, and they subsequently retracted the 1099. For that reason, the good folks on r/churning are recommending holding off on doing your taxes immediately with the hopes of a retraction.
In Chase’s case it somehow made more sense to 1099 given the fact that it’s possible to actually cash those out at 1 CPP. In Citi’s case, they 1099 you based on actual value received. Amex’s method of, somewhat arbitrarily, giving a value to the unredeemed point and treating it as cash is somewhat troubling.
Related:
I referred my wife for SPG card and got 7,500 points. But I still haven’t got the 1099.
Anyone else ? Or am I the only one?
Amex evaluates all points at 1 cpp, except Hilton which is evaluates at 0.67 cpp. If your combined “free” points including your referrals, retention bonuses and all courtesy points are less than $600 they most likely will not send you 1099 at all…
To sum it up, you should be fine. No 1099 for you.
I didn’t get anything either for 40,000 MR points worth of referrals.
I got 2 separate 1099s from Amex, however, they seem to be in reference to the same account. I had 3 10k Amex Everday referrals in 2018, so $300 is expected, however, I got one for $300 and one for $400. Do I have any recourse here with Amex?
Hi, NOT a tax accountant here (rather an IT)… but I have been doing 1099 reporting for our company for many years. For several years now the account number is mandatory by IRS on 1099-MISC form (used to be optional, but now mandatory). This tells me that there could be no 2 different 1099-MISC for the same year for the same payee/payer combination with the same account.
Please check if one of those forms has a “correction” checkbox checked on it. If so, this is the one which matters. Hopefully the one with $300 is a correction, and supersedes the other one.
Good luck.
I found out the issue and it’s me lol, I have two amex accounts with the same last 5 digits (!) and got them confused. One is for SPG referrals and the other is the Everyday card.
We had 2 SPG referrals during 2018, under $600 value, as of receiving our mail on 02/07/19, never received a 1099. We have waited a few extra days before filing our taxes to see if a 1099 would arrive and now believe that we will not receive one due to being under $600.
Thanks for the DP. Referred and got 30k mr in 2018 but have not got a Amex 1099 yet.
Have anyone tried to follow the path suggested here?
https://viewfromthewing.boardingarea.com/2014/04/12/getting-taxed-miles-heres-dispute/
May worth it if you have significant amounts..
Called Amex, talked to a manager to file the complaint. Interesting detail – she said that the complaint will be filed, and forwarded to the proper department, but… (a) it will not change any information on 1099 I recieved, and (b) I will not be informed about any outcome of the complaint consideration even if I call. This is completely internal process.
It does not make sense at all for me. I argued that by the definition of a complaint it has to have some sort of response… but it did not get me anywhere.
If anybody filed a complaint with Amex, where did you guys file it? Called/mailed?
I know that would not change much, but if more of us complain at least about the valuation this may result in a lower values for the points for 1099 purposes. Amex (if has a will) may not be able to fight IRS on the fact that they need to send out 1099s, but it is probably at Amex’s sole discretion how much they value the reported points.
Thanks!
I have not yet received a 1099. I did have several referrals, mostly from Hilton. Is there anyway to access these 1099’s online? Thanks!
I didn’t see any posting earlier on a specific department and phone number. Anyone have one?
I got 40k in referral bonuses and a $400 1099.
I got a $200 and $100 1099 not based on anything I could find.
Chatted and he said he’d refer it.
The only real cash equivalent I could see was their amex gift card at $200, for the 40k MRs, making them worth $.005/pt, not $.01/pt
interesting topic. the big question is whether you can actually dispute the 1099 with the IRS, since amex probably will not retract/amend the 1099.
viewfromthewing proposed this method:
https://viewfromthewing.boardingarea.com/2014/04/12/getting-taxed-miles-heres-dispute/
Regards
I haven’t seen one for the one referral that was done through a Cash Magnet ($75), but have been looking out for something – perhaps there is some sort of threshold lower than the $600, but higher than $100?