Well, this is frustrating.
Smartly, some readers asked the question: Will there be a 1099 for this? And the answer is, since it’s an incentive for a banking deposit, yes.
But what value will Chase assign to the 50,000 points?
You see, this has gone very wrong before. Year ago, Citi was giving out Thank You points for banking deposits and actually sending the 1099 in the year you redeemed based on the value of the redemption. That was a MESS.
Citi also just settled a lawsuit pertaining to their sending 1099’s for the issuance of American Airlines miles with a value of 2.5 cents a piece. Yes, in most cases the person who earned those miles paid more in income tax than they could get in value from an AAdvantage mile (which is only worth north of 2.5 cents on a minority of skilled redemptions.)
So, I have spent several hours with a patient Chase Private Client banker calling everyone we possibly could inside Chase to find out what value Chase plans to assign at year end for the 50,000 Ultimate Rewards points.
The answer? ”Consult your tax advisor.”
Wait, what? My tax advisor can only advise based on the information. Information that Chase can’t or won’t provide – namely the value being assigned to the Ultimate Rewards points.
So, call after call, we explained to people from the “back office” and other related departments – the names of which were unclear – and got the same variety of disappointing answers one after another.
“We don’t know.”
“Tell him to consult his tax advisor.”
“What promotion?” (Seriously, approximately half of the back office folks didn’t know this very promotion existed)
“He’ll need to talk to his accountant.”
Every time I had the rep ask for a value – “Will 50,000 points get a 1099 for $500? $750? More?” the answer came back to ask my accountant.
Hey Chase, my accountant does not know the value you plan to assign to your own points.
In fact, Chase, you don’t appear to know! A tax professional cannot advise on a black box of data. It’s like being told to go to my accountant and say “So, I may make $10 or $10,000,000 this year. Please craft my tax strategy. Thanks, bye.”
For all the compliance involved with banking, I find it unbelievable that a bank is unable to tell customers what value will be on a 1099.
If someone at Chase is reading this and can provide an official on-the-record value, please let me know.
I’m trying to help you avoid customer outrage or a potential lawsuit – just Ask Citi.
