Capital One Reporting Statement Credits as Income
With tax season well underway, you have probably received 1099 from multiple financial institutions. It’s normal to receive these forms for bank bonuses, or even referrals on some credit cards. But Capital One seems to be including statement credits as well.
In recent days many people have reported strange amounts on 1099s from Capital One. And apparently the discrepancy might be the TSA PreCheck/Global Entry statement credit, or the $300 travel credit on some Capital One credit cards.
This is a strange decision from Capital One, since these rebates are normally not considered income and are not taxable. But Capital One seems to think otherwise.
I should clarify that I’m not a tax expert. But as far as I know, just because a certain amount was reported on a Form 1099, it doesn’t mean that it is correct and you have to pay tax on it. Companies sometimes send a 1099 when they shouldn’t or put a wrong dollar amount, as in this case. You should be able to submit a correction and subtract the amount that you think is not taxable. In this case that would be the $100 for the Global Entry credit for example, or the $300 travel credit.
On the other hand, it should be noted that even if you don’t receive a 1099, you should report all earned income. Capital One and other banks will only send a 1099 if you have earned more than $600 during the last calendar year.
One other twist from Capital One is that if you have earned miles, then the bank is valuing them at 1.0029 cents each.
Conclusion
Many people have received 1099s from Capital One with unexpected or strange totals. This could be because Capital One is considering statement credits taxable and valuing miles just over 1 cent each.
Let us know if you have received a 1099 from Capital One and if you think the total is incorrect.
HT: MilesTalk and View from the Wing
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Individuals should request from Capital One a schedule of income comprising the 1099. Provide that schedule to your tax return preparer. Tell your tax return preparer to EXCLUDE income allocated to statement credits associated with a purchase (such as TSA pre-check credit or dining credit, etc.) and to include a footnote on your tax return references their non-taxable character under TC Memo 2021-23 (Docket Number 13080-17). This is called a “disclosed position.” If you’re right, you’ve saved yourself the tax. If you’re wrong and tax is due, the disclosed position will allow you to avoid a penalty on the underpayment.
But it is earned income. Did you have it prior? No.
My girlfriend got a 1099 for a higher amount than what she owed and what I mean by that is she got screwed by Capitol One and she stopped paying them and it went to collections and in which a agency bout the account from Capitol One so in this case there committing fraud double dipping. And I think they should be Sued.. so many companies now days are for there profits and gains and how they can screw over the next person.
How do you find your referral bonuses to see if they add up?
They should show up in your points activity.
I’ve always thought Capital One is one of the most pain in the butt credit card companies there is, we stay away from them and their offers
How is this legal? Banks should be required to report the correct amount, not just some random amount they feel like.
I don’t get a 1099 for the $1000s of dollar of Amex offers / platinum FHR & airline incidental & digital entertainment credit, and gold dining credits annually, so why does Capital One think they can report this as “interest income?”
We didn’t have any referral bonuses due to their asinine rules about never having any Capital One card ever (not just not having a Venture X), so we lucked into not getting a 1099 with the $300 travel credit, $100 Global Entry credit, and the $200 Airbnb credit coming right at the $600 threshold.
I got a 1099 for $752 and change. I had three referrals last year and used a portion of the $300 travel credit. Can I just not report this on my 2022 return? Or is this a question for my accountant?
You have to report it, since it was reported by Capital One, but you can make an adjustment when you file and provide an explanation. But yes, it is a question for your accountant?
Jeez. If I get a 1099, I’ll probably dump my Venture X. I used the $300 travel credit, but that’s it. I’m glad I wasted the AirBnB and other credits if that helps me avoid the hassle of reporting/correcting this ridiculousness.
Simply unacceptable. How is it that C1 has their head so far up their own arse?
Capital One is good for one thing and one thing only: a sign-up bonus . . . then punt.
Where’s Alan when you actually need a “dumpster fire” comment?
What’s in your wallet. ? Hopefully nothing from this GaRBAGE company. So glad I cancelled. I got a tax bill for credits I didn’t really redeem since SIXT rental car didn’t have any cars available. Cancel anything you have from this garage organization.