Has anyone got a 1099 and paid taxes on Royal points?

[steveru621]

From the card terms and conditions: Royal Points expire 60 Months from when they are earned. The value of this reward may constitute taxable income to you. Bank of America may issue an Internal Revenue Service Form 1099 (or other appropriate form) to you that reflects the value of such reward. :eek:

 

Has anyone got a 1099 and paid income taxes on Royal points?

[Retired LEO]

From the card terms and conditions: Royal Points expire 60 Months from when they are earned. The value of this reward may constitute taxable income to you. Bank of America may issue an Internal Revenue Service Form 1099 (or other appropriate form) to you that reflects the value of such reward. :eek:

 

Has anyone got a 1099 and paid income taxes on Royal points?

 

Never

[Ocean Boy]

And if you don't use the points they are of zero worth. What would you do when they expire, apply for a refund?

[steveru621]

And if you don't use the points they are of zero worth. What would you do when they expire, apply for a refund?

 

 

Not sure I understand your point? A refund of what?

[Ocean Boy]

Not sure I understand your point? A refund of what?

 

The taxes that you paid based on the 1099.

[steveru621]

The taxes that you paid based on the 1099.

 

The best answer I could find is probably not.

 

http://www.creditcards.com/credit-card-news/irs-taxable-income-credit-card-rewards-points-gift-1277.php

 

I see what you are saying. But a 1099-misc is issued for income received, not taxes paid. The credit card company would have to withhold and pay/send the taxes on your 'income' If they don't withhold taxes, like your paycheck, the there would be no refund process. Interesting point though.

 

No telling what the government will do in the future for extra revenue. I know they wanted to tax you when you used skymiles for a free ticket. Fortunately that never happened, but who knows what the future holds.

[CptSticky]

I have used points for several years. I buy OBC on each cruise. Have never received a 1099 for them. I would think that they could be considered a refund of your money spent and thus not taxable. Sort of like money received from insurance.

[waterbug123]

And if you don't use the points they are of zero worth. What would you do when they expire, apply for a refund?

 

 

I see what you are saying. But a 1099-misc is issued for income received, not taxes paid.

 

I'm guessing that what Ocean Boy was saying is that if you got a 1099, theoretically you would have to claim more income and possibly pay more income tax. Then, if the points expired and you never actually got the benefit from them, perhaps you could file an amended return that deletes that 1099 from you income, have less income to claim and less taxes, ergo- a possible refund of income tax paid that particular year.

[Ocean Boy]

I'm guessing that what Ocean Boy was saying is that if you got a 1099, theoretically you would have to claim more income and possibly pay more income tax. Then, if the points expired and you never actually got the benefit from them, perhaps you could file an amended return that deletes that 1099 from you income, have less income to claim and less taxes, ergo- a possible refund of income tax paid that particular year.

 

Exactly.

[steveru621]

I'm guessing that what Ocean Boy was saying is that if you got a 1099, theoretically you would have to claim more income and possibly pay more income tax. Then, if the points expired and you never actually got the benefit from them, perhaps you could file an amended return that deletes that 1099 from you income, have less income to claim and less taxes, ergo- a possible refund of income tax paid that particular year.

 

OK, but I was assuming you would only get a 1099 for actually cashing them in, not just receiving them. That's what makes the Citibank case weird, if you never actually received any benefit you shouldn't get a 1099! But I guess that's why we have so many tax accountants, nobody understands the tax code.

[CruisesOnMyMind]

From the card terms and conditions: Royal Points expire 60 Months from when they are earned. The value of this reward may constitute taxable income to you. Bank of America may issue an Internal Revenue Service Form 1099 (or other appropriate form) to you that reflects the value of such reward. :eek:

 

Has anyone got a 1099 and paid income taxes on Royal points?

 

We've had two free cruises with the points....one last year and the other 3 years ago. Never recieved a 1099 or any other form from them.

 

Not to worry:eek::D

[Bakincakes]

Who knows what will happen in the future.

 

Nothing coming out of Washington would shock me.

[Mark_K]

Strictly, legally, speaking, the value of reward bonuses for signing up to a credit card program are taxable as income, but points "earned" by spending money are not. Most people ignore this and so do most CC companies. If a CC company would happen to issue a 1099 for the value of their bonus you would likely have to pay taxes on it.

[TxKroozer]

First CC company to send a 1099 would be singled out and they would likely lose a large percentage of account holders. Unless they all do it together, the public will never put up with them getting away with it.

[John&LaLa]

did a free cruise with points this summer. i am not expecting a 1099. nevder got one from Delta or Hilton

[aurelius180]

I've never received a 1099 and have taken a couple "free" cruises.

 

My guess is it's included in the disclosure should the bank at some point have to issue a 1099 either due to a special case or a change in tax law.

[Mark_K]

First CC company to send a 1099 would be singled out and they would likely lose a large percentage of account holders. Unless they all do it together, the public will never put up with them getting away with it.

Citi did it a couple of years ago.

[Mark_K]

I've never received a 1099 and have taken a couple "free" cruises.

 

My guess is it's included in the disclosure should the bank at some point have to issue a 1099 either due to a special case or a change in tax law.

If you got them from points earned by spending money, it's not taxable, it's only bonus points that may be.