Yep, it’s that season again. Every year there’s at least one story of a bank doing something wonky with their 1099s. This year the honors go to Bank of America who are apparently sending out 1099-MISC for credit card signup bonus earn.
Reader L. sent me over a picture of a 1099 they received from Bank of America for $650. It’s clear on the form that it’s coming for Air France/KLM card. Apparently, they consider the 50,000 points and $150 earned from the card signup (and $2,000 minimum spend) to be taxable. I’ve never heard of any bank considering credit card signup bonuses to be taxable since the reward is typically considered a rebate on the spend. Historically, there have been cases of 1099s for points earned from bank openings, but never from credit card signup bonuses.
We don’t yet know if the 1099 is only coming for the Air France card or for all Bank of America signup bonuses. Please let us know in the comments below if you get a 1099 and on which card.