1099’s for Chase Ultimate Reward’s Bank Bonuses
If you were wondering whether your Sapphire Banking Bonus would be taxed and how much those Ultimate Reward’s Points would be valued at Doctor of Credit reported this week that Chase was in fact sending out 1099’s to customers who received Bank Bonuses in the form of UR points.
This is not a new concept, cash bonuses always trigger a 1099. Additionally Citi ThankYou Point Checking bonuses have been treated as taxable, so it’s not a shock for Chase to do the same. The more likely issue was the value of the points. Chase has valued them at 1 cent a piece which is fair since you can effectively cash them out for the same value.
Rewards earned from credit cards are not treated as taxable income whereas rewards earned from banking bonuses are taxable. The affect taxation has on the value of your points really depends on how much you value your points at and what your effective tax rate on each point is. Some people are in lower brackets and pay way less in state and federal taxes than others. On a 60k UR bonus, one person could pay $200 in taxes and someone else could pay nothing on the same bonus, so whether this affects you and how much is entirely dependent on your situation. I personally dislike bank bonuses and anything that increases my taxable income.
HT: Doctor of Credit