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:Â Chase To Send Out Corrected 1099 Forms
Non-resident here, I got a 1042-S with $5 on there and $2 withheld for the paperless bonus. However, no money was withheld from me so I think Im supposed to file and get $2 more back from the feds?
If $5 were deposited to your checking account check the statements, they might have taken $2 back… although I have to admit it is getting ridiculous 🙂 especially if you had no other taxable payments from Chase.
I meant “mail gets lost” , sorry for the typo
How can I know 100% if the sent out the 1099?
I.e., mail gets lots. Are these tax statements available in my online account as PDFs?
In case of Chase, they may be.. but the problem is that any 1099 income is reportable by law, so even if you do not get 1099 (under $600) it is your responsibility to pay taxes. So, if you know you got more than $600 of freebies (referral bonuses, courtesy credits), but did not get 1099 MISC, reach out. If you got less (and you know it), then I would not worry. The 500 points vs $500 issue was a mistake, and it has been fixed back then.. so I would not worry about that one.
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another boglehead reported same thing. my wife does have two Freedoms, open for years.
https://www.bogleheads.org/forum/viewtopic.php?f=2&t=272124&p=4366342
WTF? My wife got a $1000 1099-MISC from Chase. It lists two $500 “incomes”. According to my notes she received *nothing* from Chase in 2018.
I’m trying to find out more.
delete this
What about the cash back then? The 3pts/$ Freedom Unlimited? I put like $70k on it, getting over 200k points. If they value it at $1/pt then I am straight dead…
Au contraire, Chuck. I got a 1099 for only a single $5 saved from paperless statements.
I believe they send out smaller 1099s, but only if you have $600+ across all 1099s. Is it possible you have more 1099s still coming in the mail?
I only got $15 paperless statements bonus from Chase for the whole year and still received 1099, so I guess $600 is NOT the requirement. Also, we need to report all the earnings for 2018 on tax purpose this time (“no exemption” is one of the major change). I guess this may be the reason why the banks are sending these tax forms.