Chase Acknowledges That It Sent out Some Inaccurate 1099 Forms
Whenever you receive anything from a company during the year that's worth a total of more than $600, you may receive a 1099-MISC tax form claiming its value as "other income." This year, several of the major credit card issuers including Amex and Chase are sending these forms to card holders in response to referral bonuses they were granted.
This in and of itself is new; these issuers haven't regularly sent out 1099s for referral bonuses in the past. However, Chase's systems in particular appear to be lumping in a wide variety of other bonuses into the 1099 forms that some card holders have been receiving, such as the bonus for requesting electronic statements, and even refunds of annual fees that were waived for various reasons.
Some 1099-MISC forms that Chase has sent out reportedly had wildly inaccurate estimations of the value of the points and miles received. For example, as Doctor of Credit reported, Chase appears to be valuing the 500-point bonus for enrolling in paperless statements at $500 — clearly a mistake.
I reached out to a spokesperson from Chase, who offered this response: "We sent out some IRS Form 1099-MISCs with incorrect dollar amounts from Chase Bank USA, NA. We apologize. We're double-checking our files and will send out Corrected 1099-MISCs to affected customers as soon as we can."
When You May Receive a 1099-MISC
The 1099-MISC form is intended to be issued when someone receives miscellaneous taxable prizes, awards or other income payments, among other things. Points and miles can fall under this category, but here's the thing: To qualify for the 1099-MISC, the value of what you receive must exceed your costs necessary to earn the prize or award.
For example, if you spend $10,000 on your credit card and receive 10,000 points or miles, or even $100 in cash back, the value of those rewards are only a small fraction of the amount you spent, and should not be reported as taxable.
On the other hand, if you receive a $500 cash bonus just for opening up a checking or savings account and making a deposit, then you haven't actually spent anything to receive your gift or prize. In this case, the entire $500 may be considered taxable income and you may receive a 1099-MISC form.
If there's an obvious error, one solution is to contact the issuer of the 1099-MISC and ask for it to be corrected. Unfortunately, that probably won't be something that the average telephone customer service representative will have the authority to do.
Thankfully, Chase recognizes that it sent out some 1099-MISC forms in error and has pledged to send out corrected forms. In this case, just a little a patience is probably in order.
TPG featured card
at Bilt's secure site
Terms & restrictions apply. See rates & fees.
| 1X | Choose to earn up to 1X points on rent and mortgage payments with no transaction fee |
| 2X | Earn 2X points + the option to earn 4% back in Bilt Cash on everyday purchases |
Pros
- Choice to earn up to 1 Bilt Point per dollar spent on rent and mortgage payments
- Elevated everyday earnings with both Bilt Points and the option to earn Bilt Cash
- $400 Bilt Travel Portal hotel credit per year (up to $200 biannually)
- $200 Bilt Cash annually
- Priority Pass membership
- No foreign transaction fees
Cons
- Moderate annual fee
- Designed primarily for members seeking a premium, all-in-one card
- Earn points on housing with no transaction fee
- Choose to earn 4% back in Bilt Cash on everyday spend. Use Bilt Cash to unlock point earnings on rent and mortgage payments with no transaction fee, up to 1X.
- 2X points on everyday spend
- $400 Bilt Travel Hotel credit. Applied twice a year, as $200 statement credits, for qualifying Bilt Travel Portal hotel bookings.
- $200 Bilt Cash (awarded annually). At the end of each calendar year, any Bilt Cash balance over $100 will expire.
- Welcome bonus (subject to approval): 50,000 Bilt Points + Gold Status after spending $4,000 on everyday purchases in the first 90 days + $300 of Bilt Cash.
- Priority Pass ($469/year value). See Guide to Benefits.
- Bilt Point redemptions include airlines, hotels, future rent and mortgage payments, Lyft rides, statement credits, student loan balances, a down payment on a home, and more.