Bank bonus promo - Report it as Interest or Misc Income

Forum|Forum|4 years ago
February 17, 2022
1 reply
28 views

I received $300 in bonus for opening a checking account at Union Bank. One of those promo offers where they ask you to open a new account, keep it for 3 months and we'll deposit $300. However, I didn't receive a 1099 (I was expecting 1099-INT). I called them and they told me the following:

"(a) They do not issue 1099 if less than $600, (b) it is not a taxable event and therefore (c) I should not report it either".

I am fairly certain they are incorrect about b & c. We went thru 10 minutes of discussion with their management and I finally gave up! I know I have to report this in my tax return. Given the $600 threshold they mentioned, I am assuming that they would've treated this in the 1099-MISC form (instead of INT). With that said, my question is:

Since they are not going to send me anything, should I report this $300 as Interest or Misc Income? Does it matter? I am asking because: what if months from now they realize the mistake and issue some 1099; I would like to avoid filing an amendment. So which approach is the safest, should I report it as INT or MISC? TIA.

Not A Product Question

Best answer by Vanessa A

You are correct, you do need to report it. It would be considered other Misc Income. To enter this income click the following:

Federal
Income and Expenses
Scroll down to Less Common Income and click Show More
Start next to Miscellaneous Income
Start next to Other Reportable Income

Vanessa AAnswer

Level 15

You are correct, you do need to report it. It would be considered other Misc Income. To enter this income click the following:

Federal
Income and Expenses
Scroll down to Less Common Income and click Show More
Start next to Miscellaneous Income
Start next to Other Reportable Income

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Anonymous

Thank you @Vanessa A

In the past and exact identical situations, other banks have categorized this bonus by sending a 1099-INT. Out of curiosity, why is there an inconsistency and how do financial institutions determine if this is to be categorized as Interest vs Misc Income? (I also read other similar topics on this community where the suggestion was to report it as interest). Is this one of those gray areas since the end result is perhaps the same? Thanks again.

Opus 17

Level 15

@2807077 wrote:

Thank you @Vanessa A

In the past and exact identical situations, other banks have categorized this bonus by sending a 1099-INT. Out of curiosity, why is there an inconsistency and how do financial institutions determine if this is to be categorized as Interest vs Misc Income? (I also read other similar topics on this community where the suggestion was to report it as interest). Thanks again.

A 1099 is only required if the amount is over $600.

For purposes of the bank's internal accounting, they might consider it as interest, or as a marketing expense. I don't know why one bank would go one way and another bank another way. There's no difference to your income tax if this is interest or "other income."