Posted by Chuck on February 5, 2019
Credit Cards

Published on February 5th, 2019 | by Chuck

109

Chase Sending Out 1099 for Other Bonuses Too, e.g. Paperless & Retention Bonuses; Also Mistakenly Reporting 500 Points as $500(!)

Update: Chase will send out corrected 1099 forms.

So this is turning into a real ****storm.

Chase this year decided to send out 1099s for referral bonuses earned during 2018. Many reports are now coming in with Chase 1099ing other bonuses earned during the year:

1) $5 or $15 paperless statements bonus. Many people are reporting this. E.g. if they had 16 referrals, they are getting a 1099 for $805, the extra $5 being for the paperless signup.

2) Retention bonuses (1, 2, 3, 4). Not sure if they’re sending out for retention bonuses which require spend – those should be like signup bonuses which are considered rebates – it may be only for those that don’t have spend requirements. (It’s still odd being that the retention bonus is usually meant to partially offset the annual fee. As one r/churning member noted, it’s like getting a 1099 for using a $20 off coupon on your Costco membership.)

3) Two reports reader (1, 2) of getting 1099ed for a Marriott card upgrade bonus.

4) A reader suggests they are sending out 1099s for bonus Ultimate Rewards earned from a Best Buy purchase special offer (!?!?). This is getting pretty crazy if true. This reader’s 1099 was for $910.85, so Chase has obviously some wacky stuff going on here.

5) One r/churning member got a 1099 for various mortgage cashback and rebate offers they received from Chase.

Note: It seems so far that Chase is only sending out 1099s to those who earned $600 or more during the 2018 year. So if all you got the entire year is a $5 paperless bonus, you probably won’t get a 1099. But if all your bonuses bring you up to $600, you’ll get a Form 1099. You might get a few Form 1099s with smaller amounts which equal $600 total.

Another issue mentioned by multiple readers (1, 2, 3, 4, 5) is that Chase sent out a 1099 valuing the 500 points paperless bonus at $500! Yeah, that’s obviously a mistake, and presumably they’ll correct that one. This $500 issue also pushed a lot of people over the $600 threshold, e.g. if you got the 500 points bonus + 2 $50 referral bonuses, you’ll get 1099ed due to the $500 + $50 + $50 bonuses.

Anyway, this whole thing is turning into a real pain in the neck, most people just give their W-2 and a couple of other tax forms to their accountant, this takes it to a whole new level. We’ll have to see how it plays out. Obviously the 500 points mistake should get a retraction, but I’ll hazard a guess that some of the other stuff will get retracted to (though probably not the main thing which is the referral bonus part).

Follow-Up: Chase To Send Out Corrected 1099 Forms



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CJ
CJ

Is there something in the new tax law requiring that banks do this?

Austin
Austin

Gotta think this is on purpose to try and discourage churning behavior, without going so far as to deny applications/shutdown users that are still generating chase income through card usage.

vince
vince

nah. just compliance

Wyle
Wyle

They’re not punishing churners, per se. They’re punishing those who brought them customers.

sam
sam

Lol and turned them into churners….make no mistake I’m not on the banks’ side.

ian
ian

fortunately, they’re no longer allowed to shut down our UR balances because we paid taxes on some or all of it.

ChurningFast

Didn’t get a 1099. Had exactly 5 referrals for 50k UR. Even though I took the $5 offer to sign up for estatements, just realized those 500 points never posted, which seems to be great blessing at this stage!

Paul
Paul

Didn’t get a 1099… yet

bob
bob

how do y ou know you had 5 referrals? i’ve only gotten a couple referrals, and i only now b/c the points just magically showed up.

also: if you had gotten $500 points worth of UR (50K),the taxes wouldn’t consume all of it. you’d still be ahead

Gadget
Gadget

What or who is this accountant you speak of? And a couple forms? I wish!

Debit
Debit

Half the country saw this coming when the “tax cuts” were passed. Not this exact thing but a good feeling that something shady was being done. The other half still has their heads in the sand and their asses in the air.

I can bet trump’s tax returns has no surprises. It’s straight tax cut down the line.

Sam
Sam

You know perfectly well this has nothing to do with the tax cuts.

Debit
Debit

I know perfectly well the president and the party in power gets blamed for everything. Even if people get constipation it’s the president’s fault. That’s how it is in american politics. Don’t be coy now.

Sam
Sam

fortunately, there isnt really anything shady about across the board tax cuts (just means the government forcefully separates less of your hard-earned paycheck from you). the IRS on the other hand, with its ad hoc rules changes, is extremely shady (see: Bobrow v. Commissioner, T.C. Memo. 2014-21)

LC
LC

such a uninformed comment.

Ryan
Ryan

Nope, nothing to do with the tax reg changes, or Trump, or the position of the last full moon, etc.

bob
bob

and when they gutted the CFPB

Zalmy

This is why we need downvoting, Chuck William Charles

Sam
Sam

ridiculous. this new 1099 issuing is egregiously immoral, to me its almost on the level of obamacare taxing people for not purchasing healthcare. its equivalent to taxing unrealized capital gains in a stock portfolio. no monetary or material gain is realized until these points are actually redeemed. as others have mentioned, points can even expire or get forfeited for account closure by consumer or the bank. i’d actually be fine if they issue the 1099 upon redemption, but that would be a nightmare for the banks to track. but that’s what they get for creating and operating with their own valueless fiat currencies.

MoreSun
MoreSun

I’d rather take it now than at redemption! That would be a complete mess.

Sam
Sam

The government would like that too! they would be happy if you prepaid all your future taxes

Frank

Wait, were you guys not reporting the $20 reward for Costco membership? Hope the IRS doesn’t audit you…..

VL
VL

I got 40K URs in referrals, and $5 for paperless statements, but for an actual account, not for the cards,,, and it actually posted as a $5 credit. No 1099s as of yet.

Would you please clarify, when you accept paperless bonus on a UR card, do you get 500 UR points as a bonus, or $5 as a statement credit? If you get 500UR, then it is clear why $5 checking account statement credits did not get into that $500 mess.

Thanks a lot!!!

Matt P
Matt P

You would have to think they can’t 1099 you for something you do not actually posses. Your points aren’t really yours until you redeem.

Still, seems like the referral game just isn’t worth it anymore.

Parts Unknown
Parts Unknown

Whenever there’s a who’s the worse bank competition I always expect Chase to come in first. I mean, they’re only a multi billion dollar banking institution, it’s a bit much to assume they could manage to have accurate accounting/tax forms mailed to the customers who bring them business. Especially after last year’s 1099 cluster.
Dear Hyatt, please drop Chase like the hot pile of dog crap they are. Amex is a better fit for you anyway & we all know it.
/rant

Lrdx
Lrdx

If you didn’t notice, AmEx is also sending these 1099s..

Parts Unknown
Parts Unknown

Right, but I haven’t gotten one from amex that valued the points at a dollar per yet.

VL
VL

I got 1099 feom Amex for Marriott referrals at 1 cpp. If you did not get it may be your combined amex referrals are under $600 pet their evaluation?

miafll
miafll

there are DPs Chase even sent out a 1099 on $10 presumably earned from signing up Quick Pay!

When the recipient called the telephone number on the 1099, he got an Indian call center!

Chase is so cheap to outsource the tax reporting to overseas hence this 500 pt equals to $500 error – definitely derived from programming errors – time and again, proven using Indian software firms can actually cost companies money.

I were those who receive such 1099s I would demand an AMENDED 1099 to be sent. It is your legal right.

katie taylor
katie taylor

i had to speak to 3 different departments before I got an answer. The first at the number on the notice was to a call center in India who promptly transferred me to regular customer service agents in the US I believe. That’s based on the accents of the agents.

VL
VL

… and if you did not notice, Amex’s point evaluation is way worse and more out of the line than Chase’s one.

Chase will correct their mistakes, and will send out 1099s corrections (there is no other way around it), but at least their evaluation of UR is based on their actual cash value. And I do not get the complaints about “I do not owe Chase points” either – cash them out now if you are not happy… at least cash out exactly the amount you need to cover your tax overpayment (which will be a portion of your referral bonus)… and the rest of your referral bonus is actually free money.

Good luck with Amex acknowledging that Marriott/Hilton points are not worth 1/0.67 cpp… And there is nothing you can do – you have to keep them and pay cash to IRS.

Not happy with Chase’s decision to send 1099s either, but in my books it is Amex who is creating more damage and acting unfairly.

Geo

You absolutely can challenge Amex’s value on your tax return and pay taxes on that amount.

VL
VL

I will. I will fight them hard and complain big time. But unless they send out a correction for 1099 i am not sure if i want to invite an IRS audit by reporting not matching 1099 income. Will seriously consider to just report it as is… and just get back at Amex with other bonuses 🙂

Andysoll1983
Andysoll1983

@VL

“Chase will correct their mistakes, and will send out 1099s corrections (there is no other way around it), but at least their evaluation of UR is based on their actual cash value.“

If you haven’t called the 1099 department for chase yet, you’re in for a treat. They are complete morons and only read a script. The best part? There is no American call center- if you ask for one, they’ll tell you there isn’t a 1099 American department/call center. You’re stuck with the third world call center speaking with “George” and “Diane” who has no idea about US taxes. You want to dispute a value? They send you to the front line customer service rep.

I was on the phone for 3 hours yesterday and maybe 15 transfers. No one was of help no matter how high I went up in the chain. I don’t know how they’re going to correct anything unless a big blogger like TPG or something can pound the drum. And we know those guys don’t work for us. Sigh.

VL
VL

Wow… i am really sorry. Did not realize it is that bad. Luckily I never go for papeeless on the credit cards – only on bank accounts (shame on me for ruining the trees, but I need the reminder on my desk to not miss a bill with number of cards I am dealing with).
Sorry again for the horror story you need to deal with.

Ferris
Ferris

Multi trillion

MoreSun
MoreSun

WF slam dunked that competition years ago, no one will come close to touching the level of greatness they achieved.

Mike Advantage
Mike Advantage

It’s time for a lawsuit

Linda L
Linda L

Agreed. They are corrupt and do whatever they want with no accountability. My association with them ruined my credit. In 2 years I should be able to free myself from their grip.

Linda L
Linda L

Chase is the worst bank. If you get an Amazon credit card which is a Chase credit card or any other Chase credit card, Chase will do a hard pull in your credit. Other banks only do a soft pull. Why does this matter? Because if you have 5 hard pulls in 2 years, it will lower your fico score. Chase raised my $1830 mortgage payment $60 for escrow balances. I didn’t catch it because I moved and used automatic payments to pay my mortgage. They applied my payment to principal because it was $60 short and reported me as late paying my mortgage for the first time in 9 years of paying on time every month. Dropped muy fico score from the 800 range to the high 600 range. Had to pay 2 percentage points higher on my house purchase this year railing a difference of over $800 per month. They wouldn’t consider me for my new mortgage. Right before this happened, I ( stupidly) moved several business accounts over to Chase, going through a very lengthy paperwork process and spending hours with a business banker. 8 months later I receive letters on 4 out of 5 accounts saying if I don’t give them a call they will close muy account. The letters looked like a scam. I verified they were from Chase. I had to discuss in detail what I did with each business, which is simple. Nothing except collect rent and pay rent. There isn’t more than $2,000 in most of these accounts a and $6000 in the other one. They said to Google KYC because it was a common practice. Its not. Never had to do this at any other bank. I could understand it if I was churning a couple hundred thousand through my account but that just is not the case. Once I build up the balances I’ll take my money elsewhere.

Brandon
Brandon

Exactly how many banks do a soft pull for a new credit card?!? I know of one and they have very subpar cards.

Ryan
Ryan

AMEX will frequently not do a hard pull for existing customers applying for a new card.

VL
VL

True, but mostly on biz cards.

perfectviking
perfectviking

I’ve had one hard pull from Amex each year for all types of cards.

Ryan
Ryan

Nope, haven’t had a hard pull from Amex for personal cards either, in the past couple of years. Same is true for my wife.

VL
VL

Good to know. Thank you! I am trying to do mostly biz cards where I can for obvious reasons, so my DPs on personal Amex cards are slimmer… For biz cards they have not pulled our (both my and P2 credit) for over 2 years, and we had quite a few of those.

VL
VL

Any number of hard pulls reduce your score – even 1 (though insignificantly), virtually no banks will approve you for a credit card without a hard pull, if you had an escrow balance you did not know about it and did not review your mortgage statements regardless of your auto payment set up – you need to share the blame… sorry.
Feel really bad for you, but it does not look like all bank’s fault.
I am frustrated with Chase for my own reasons… but you need to be factual with your complaints.

Celia
Celia

You’re blaming Chase because you didn’t review your mortgage payments? With property taxes and/or insurance, escrow changes every year. Your situation stinks but if it had been the first time something like happened, And you contacted Chase to explain, chances are very likely they would have fixed it. Most banks will. Once.

Lrdx
Lrdx

Can we get downvotes enabled on this post please?

Novacat05
Novacat05

Chase has my mortgage and I had a similar experience with an escrow shortage, it was about $200 short for the year going forward. Options were to make a one-time payment or increase my monthly payment. I wanted to make a one-time payment so I did, specifically telling them to apply to it escrow balence. They mistakenly applied that payment to principle. They did correct it within a couple of days before I was about to contact them so it didn’t take any action from me, but I saw it on the account history page, they screwed it up.

You HAVE to read your mortgage/escrow statements, that’s on YOU, not your lender.

miafll
miafll

2 years ago, Chase deposited $10K of somebody’s money into my checking account. I caught that and SM them promptly. I could only imagine the person felt, when his $10K cash deposit went astray.

The SM reply was “we would investigate” rolleyes.

3 days later they removed the $10K deposit, and the SM language sounded like as if that was MY
MISTAKE. Seriously annoying.

My biggest pet peeve is, they outsourced the security / fraud prevention dept to either Philippines or India.
My online access was logged, 3 days after I used 2 deposits method to link an external account and received the “your account was linked and now you are good to go” type of email.
So I did an ACH pull from the External Account to Chase business checking, for a measly $2K.
The next day the online access was shut down!
It took a 3 way conference call from the overseas dumb bell with the external bank’s rep and me, to get the verification whether I was the owner of the external bank and whether the account bal was enough to cover the transfer… It confused the TD bank’s rep to hell so I had to chime in to get the “verification” going. The overseas dumbbell did not even have the courtesy to tell us the verification was done, just bluntly hang up.
Then my online account access was restored.

I complained bitterly to my banker at the branch. She was shocked about even a 2 deposits verification would get such scrutiny. She said she heard about customers who used the instant approval method but never the 2 deposits method. Of course her promise to reflect this to the higher up and relevant dept, has not produced any result.

The bank is just a necessary evil. Treat it as what it is and always guard your own interest by your own vigilance.

Joe
Joe

LOL

TLDR; Chase sucks because they pulled my credit when I applied for a CREDIT CARD!!!

Joe
Joe

“Churning a couple hundred thousand”

The noob comments that use “churning” as a verb in the wrong context get better and better by the week

“Just churned a VGC and got a MO!”

Ryan
Ryan

I know, right! It’s like when your grandparents try and talk about pop culture. LOL

VL
VL

Clearly the original comment came from the person who does not know exactly what she is talking about, but please try to be respectful, and not condescending. Thanks.

Snorlax
Snorlax

“Chase is the worst bank. If you get an Amazon credit card which is a Chase credit card or any other Chase credit card, Chase will do a hard pull in your credit. Other banks only do a soft pull.”

Completely false.

” Because if you have 5 hard pulls in 2 years, it will lower your fico score”

On a good credit file, it will lower your score so marginally it doesn’t matter, I mean maybe 5-10 points at most. New accounts are a much bigger deal than hard pulls and if you’re hard pulling then you’re probably getting new accounts.

“Chase raised my $1830 mortgage payment $60 for escrow balances. ”

LOL, wut? this is a complaint? Literally every bank does this. The point of escrow is to have enough to cover the bills due. Banks review and adjust escrow regularly.

“I didn’t catch it because I moved and used automatic payments to pay my mortgage. ”

1) Pay attention

2) Who the fuck relies on autopayments and doesn’t login every month to verify the autopayment was applied correctly!??!? This is what happens when you blindly rely on autopayments.Hopefully you learned your lesson.

By the way, you also need to verify the bank is actually paying your property and insurance bills, because banks fuck up escrow all the time.

“I had to discuss in detail what I did with each business, which is simple. Nothing except collect rent and pay rent. There isn’t more than $2,000 in most of these accounts a and $6000 in the other one. They said to Google KYC because it was a common practice. Its not.”

It’s certinaly not an uncommon practice.

Brandon
Brandon

I already sent in my taxes. If I get a 1099 for the 500 points for paperless statements, I’m going to flip at Chase. It was the only special offer I did that didn’t require spending. And I forgot about it until article.

VL
VL

Even with this mistake you shouldn’t get it as it is below $600. Even if you get it you will complain and they will send a correction. It is a simple procedure. I have done it for my employer before. I would not worry about it yet. Good luck.

Fred
Fred

Sometime, I’d guess between 5 and 10 years ago, I did get a 1099-MISC from Chase for $5 (I received a statement credit for going paperless, but I had to email them several times so it may have been processed as something else).

bob
bob

i wonder: are folks getting 1099s also Chase banking customers? or CC-only?

MoreSun
MoreSun

Doesn’t matter. Only thing that seems to matter is amount of income reported on the 1099s.

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