• Page :
  • 1
  • Text Only
Voting History
rated:
Searched through the finance threads and did not see anything relating to this topic.

Thanks to Fatwallet, I had the opportunity of opening a new Chase Free Checking account that came with an account opening bonus of $100. Just this last week I received in the mail a 1099-INT from Chase for the new account BONUS. Again, let me be very clear that the way in which Chase advertises these promotions is as an account BONUS and states nothing related to interest. So my issue now is that Chase is forcing me to report $100 in interest income. Even on the 1099 the description states "new Account Bonus". I have had the opportunity in the past of opening other checking accounts with bonuses and have never received a 1099.

It appears that Chase is using the classification of interest in order to fall within the applicable reporting guidelines for interest (anything over $10). If chase were to use the correct classification of reporting this other income it should technically fall under 1099-MISC, and since it falls below the $600 reporting threshold it should be excluded from any 1099 reporting.

Has anyone else out there in the FW community ran into this issue, and if so how have you addressed it? Should I just go ahead and eat the extra $20-30 in taxes or is there a way to get Chase to correct this?

Member Summary
Most Recent Posts
Regardless of whether it is reported on a 1099, it is still taxable income and must be reported. Granted that it is unl... (more)

nakor28 (Jan. 26, 2010 @ 9:47p) |

Are these considered discounts against future expenses rather than interest paid?

IrishTomBunny (Jan. 26, 2010 @ 10:06p) |

CC bonuses are considered rebates against spending. If the spending was non-deductible, the rebate is not income. They... (more)

shadow520 (Jan. 27, 2010 @ 9:44a) |

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.

Most of the banks do the same as Chase. It is in the fine print of your offer, guaranteed.

hoosierary1 said: Searched through the finance threads and did not see anything relating to this topic.

Thanks to Fatwallet, I had the opportunity of opening a new Chase Free Checking account that came with an account opening bonus of $100. Just this last week I received in the mail a 1099-INT from Chase for the new account BONUS. Again, let me be very clear that the way in which Chase advertises these promotions is as an account BONUS and states nothing related to interest. So my issue now is that Chase is forcing me to report $100 in interest income. Even on the 1099 the description states "new Account Bonus". I have had the opportunity in the past of opening other checking accounts with bonuses and have never received a 1099.

It appears that Chase is using the classification of interest in order to fall within the applicable reporting guidelines for interest (anything over $10). If chase were to use the correct classification of reporting this other income it should technically fall under 1099-MISC, and since it falls below the $600 reporting threshold it should be excluded from any 1099 reporting.

Has anyone else out there in the FW community ran into this issue, and if so how have you addressed it? Should I just go ahead and eat the extra $20-30 in taxes or is there a way to get Chase to correct this?


I highly doubt that. Every bank account I have opened for a bonus has explicitly said in the terms and conditions that the bonus would be reported as interest. It's still free money.

Read the small print when you sign up for the bonus. Most state the bonus will be reported as interest.

I have received $1000's in 1099s from these bank bonuses over years. There have only been a few banks that did not send a 1099.

Hi new member, ALL BANK ACCOUNT BONUSES are reported as interest income.

You may be thinking of credit card bonuses, which are generally NOT reported

It was in your terms, and you owe tax on the income whether it's over the reporting threshold or not.

Pay your taxes, deadbeat.

Seriously. Its free money, give your piece to uncle sam.

If it makes you feel any better, you deposited $100 for 10 days to get that bonus. That's 3,650% APR. Contrats on your interest earnings.

Thanks for the constructive feedback (sarcasm intended).

My issues is not that the income is being reported, its that the income is being reported incorrectly. 1099-INT has an inherent understanding that you have some sort of stated interest rate on a fixed account balance. The checking account opened is non-interest bearing so where is the justifcation on reporting it as interest income?

hoosierary1 said: Thanks for the constructive feedback (sarcasm intended).

My issues is not that the income is being reported, its that the income is being reported incorrectly. 1099-INT has an inherent understanding that you have some sort of stated interest rate on a fixed account balance. The checking account opened is non-interest bearing so where is the justifcation on reporting it as interest income?


again i understand you are new here and may be unfamiliar with these things, but reporting it as interest is precisely how it is done.

You are complaining about something you have no experience or justification to complain about

Guess what else? If a bank sends a gift like a free DVD player to open a deposit account, the bank will send a 1099 listing the FULL RETAIL PRICE of the item, as interest income, even if the retail price is far more than what the bank paid or what you can buy the item for

hoosierary1 said: 1099-INT has an inherent understanding that you have some sort of stated interest rate on a fixed account balance. The checking account opened is non-interest bearing so where is the justifcation on reporting it as interest income?

Instructions for Forms 1099-INT said:
Box 1. Interest Income

Enter interest not included in box 3. Include amounts of $10 or more, whether or not designated as interest, that are paid or credited to the person's account by savings and loan associations, mutual savings banks not having capital stock represented by shares, building and loan associations, cooperative banks, Homestead
associations, credit unions, or similar organizations.

hoosierary1 said: Thanks for the constructive feedback (sarcasm intended).

My issues is not that the income is being reported, its that the income is being reported incorrectly. 1099-INT has an inherent understanding that you have some sort of stated interest rate on a fixed account balance. The checking account opened is non-interest bearing so where is the justifcation on reporting it as interest income?


So, since our responses aren't what you wanted to hear, you respond with sarcasm?

Fine... in order to get the proper responses, post the T&C you agreed to when you signed up. We will review it and point out where it sayd that any bonus will be reported as interest. Or you can just point out where you were informed that it is being reported incorrectly (based on the bolding I placed on your statement I quoted).

Of course, you have a copy of the T&C's... otherwise you have no argument.


From the "IMPORTANT INFORMATION" section on my current $100 Chase Checking Bonus offer:

"Reward is considered interest and will be reported on IRS Form 1099-INT."

Not much room for misinterpretation there.

Chris.

Chase isn't trying to screw you. It is required by law to report the bonus.

You owe taxes on it whether or not they report it. So you shouldn't care, right?

Thanks for the feeback (no-sarcasm this time).

Since I had not received a 1099 on opening an account like this in the past, I was not sure how others handled it. I normally read the fine print but assumed this would be handled as other accounts I had opened.

hoosierary1 said: Thanks for the constructive feedback (sarcasm intended).

My issues is not that the income is being reported, its that the income is being reported incorrectly. 1099-INT has an inherent understanding that you have some sort of stated interest rate on a fixed account balance. The checking account opened is non-interest bearing so where is the justifcation on reporting it as interest income?

I say go ahead and don't report the income. I'm sure that the IRS will understand your side of the issue.

hoosierary1 said: Since I had not received a 1099 on opening an account like this in the past, I was not sure how others handled it. I normally read the fine print but assumed this would be handled as other accounts I had opened.
Really? How many account opening bonuses have you received in the past without getting a corresponding 1099-MISC? For me, the banks are batting 100% on sending out 1099s.

I think he is confusing credit card signup bonuses with bank deposit account signup bonuses.

CC bonuses do not usually get 1099'd

From the IRS website instructions on the 1099-INT ...

Enter interest not included in box 3. Include amounts of $10 or more, whether or not designated as interest, that are paid or credited to the person's account by savings and loan associations, mutual savings banks not having capital stock represented by shares, building and loan associations, cooperative banks, Homestead
associations, credit unions, or similar organizations.

http://www.irs.gov/instructions/i1099int/ar02.html#d0e187

hoosierary1 said: Searched through the finance threads and did not see anything relating to this topic.

Thanks to Fatwallet, I had the opportunity of opening a new Chase Free Checking account that came with an account opening bonus of $100. Just this last week I received in the mail a 1099-INT from Chase for the new account BONUS. Again, let me be very clear that the way in which Chase advertises these promotions is as an account BONUS and states nothing related to interest. So my issue now is that Chase is forcing me to report $100 in interest income. Even on the 1099 the description states "new Account Bonus". I have had the opportunity in the past of opening other checking accounts with bonuses and have never received a 1099.

It appears that Chase is using the classification of interest in order to fall within the applicable reporting guidelines for interest (anything over $10). If chase were to use the correct classification of reporting this other income it should technically fall under 1099-MISC, and since it falls below the $600 reporting threshold it should be excluded from any 1099 reporting.

Has anyone else out there in the FW community ran into this issue, and if so how have you addressed it? Should I just go ahead and eat the extra $20-30 in taxes or is there a way to get Chase to correct this?

hoosierary1 said: Thanks for the feeback (no-sarcasm this time).

Since I had not received a 1099 on opening an account like this in the past, I was not sure how others handled it. I normally read the fine print but assumed this would be handled as other accounts I had opened.
So basically you read Fine Print, and since no other bank sent you a 1099 you got away scott free. And why Chase sent you a 1099-INT, you try to make a post about how it should be a 1099-MISC?

And FYI Just because it is under $600 doesn't mean they don't have to report it in a 1099-MISC, they just don't have to. They can if they don't like you.

forbin4040 said:
And FYI Just because it is under $600 doesn't mean they don't have to report it in a 1099-MISC, they just don't have to. They can if they don't like you.


Regardless of whether it is reported on a 1099, it is still taxable income and must be reported. Granted that it is unlikely to be audited but it is the law.

SUCKISSTAPLES said: I think he is confusing credit card signup bonuses with bank deposit account signup bonuses.

CC bonuses do not usually get 1099'd


Are these considered discounts against future expenses rather than interest paid?

IrishTomBunny said: SUCKISSTAPLES said: I think he is confusing credit card signup bonuses with bank deposit account signup bonuses.

CC bonuses do not usually get 1099'd


Are these considered discounts against future expenses rather than interest paid?


CC bonuses are considered rebates against spending. If the spending was non-deductible, the rebate is not income. They are treated the same as mail in rebates.



Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.

Thanks for visiting FatWallet.com. Join for free to remove this ad.

TRUSTe online privacy certification

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2014