Do I have to claim this as taxable income? Chase discovered that they miscalculated the repayment plan for my home equity account. They issued me a check as compensation for payments I made beyond what the plan required to bring my account up to date. Someone in the tax department @ Chase today informed me some people were issued a payment as a convenience payment, but he confirmed my payment was due to an overpayment and a refund for what I overpaid. When questioned why I received a 1099-MISC for my refund due to overpayment he replied because anytime they issue a payment to someone it generates a 1099-MISC. I said if I have to claim it will cost me an additional $600 in taxes. He said if the IRS says I have to claim it to call back, open a dispute to see what they will do for me. This sounds very sketchy to me. I already paid taxes on these funds before I paid it to Chase, this was not for interest or overpayment of taxes, it was a refund for payments I made beyond what the plan required to bring my account up to date.
Does anyone know if I have to claim this on my 2017 taxes and do I have to enter in Turbo Tax as 1099-MISC income? They have it listed as #3 Other Income which is bull. I cannot get a live person at the IRS.
This sounds a little sketchy to me, as well.
If this was a reimbursement of after-tax funds you overpaid, you can eliminate the tax effect by entering an offsetting "cost in "other Income.
To report the 1099-MISC "income" (you've already done this):
The "income" will be reported on line 21 of your return (already done).
To enter the "cost":
A corresponding negative amount will be entered, and line 21 will be zero. See the attached screenshot example (different descriptions, but still offsetting).
This is the correct way to report a reimbursement. Chase is not likely to issue a corrected 1099-MISC.
This sounds a little sketchy to me, as well.
If this was a reimbursement of after-tax funds you overpaid, you can eliminate the tax effect by entering an offsetting "cost in "other Income.
To report the 1099-MISC "income" (you've already done this):
The "income" will be reported on line 21 of your return (already done).
To enter the "cost":
A corresponding negative amount will be entered, and line 21 will be zero. See the attached screenshot example (different descriptions, but still offsetting).
This is the correct way to report a reimbursement. Chase is not likely to issue a corrected 1099-MISC.
Thank you so much for your help! You are correct, Chase is not going to issue a corrected 1099-MISC. They said if I claimed as taxable I would need to open a dispute to see what they will do for me. I was advised that regardless of payment type, their system produces 1099's for all payments. All the money they have they should invest in a new system to know what is taxable and what is not. I can't believe they are allowed to produce inaccurate tax forms and it's okay. Thanks again Todd!