It’s now 1099 season, and some people have been surprised to receive 1099s on their credit cards due to referral bonuses.
Please consult with your tax advisor for tax advice. This article is for informational purposes only.
Credit card signup bonuses and rewards aren’t typically taxable and don’t usually get 1099ed since they are considered rebates on the purchase, like a discount.
However, if you earned rewards from a refer-a-friend program, that would constitute taxable income. Some checking accounts have referral programs as well, and that will work similarly.
Banks are required to issue a 1099 if the amount earned was $600 or more. Some might send for lower amounts too, though that’s not common. Technically, you’re supposed to report smaller amounts even if the bank doesn’t send a 1099.
Some banks even send out forms for points earned via referrals. If you feel they over-priced the value of the points, you can dispute the amount. Viewfromthewing has more details on how to do that.
Read:Â Current Credit Card Referral Offers
All interest income and bank signup bonuses will get a 1099-INT form, even for small amounts as low as $10. I once had a bank send me a 1099-MISC for a $125 bank bonus, but in any case, they always send some tax form for small amounts too.
Amex
A report indicates that they do not 1099 for points referral bonuses. Conversely, they reportedly do 1099 for SPG prize bonus points (with a value of 1.5 cents per point). I assume they would 1099 for cash referral bonuses in the amount of more than $600, like for Blue Cash referrals.
For year 2018, Amex did a new thing and sent out Form 1099s for all credit card referral bonuses. They put a value of 1 cent per point on all points (includes Membership Rewards, Marriott, SPG, Delta), with the exception of Hilton which was valued at .67 cents per point. Discussion on that here.
Capital one
Capital One does send out 1099s, even on a referral bonus as small as $20. Note, this may have been a checking referral which might work a bit differently.
Chase
Chase sent out 1099s for referral bonuses made during 2016, at a value of 1 penny per point, but they retracted on that. They then reversed again and sent out 1099s for referral bonuses made during 2018.
Citi
Citi doesn’t currently have a referral program.
The place where people have been getting 1099ed from Citi was for their checking bonuses. All cash bonuses get a 1099, but Citi sends out 1099s even for point bonuses, provided that you received more than $600 in value from the points in that calendar year. You can see a bit more detail here.
Discover
Discover does send out for amounts over $600. They do seem to have a weird math how they compute the $600 so don’t be shocked if you get one for less.
U.S. Bank
U.S. Bank does offer referral bonuses. Data points needed whether they send out 1099s.
