Last year, my wife was targeted with an offer of 25,000 Alaska Airlines miles for opening a Bank of America Checking account and completing a few, easy requirements. I ended up closing the account about 5 months later, used the miles to help book this awesome trip and I thought that was the end of it. Until yesterday, when I received this dreaded form in the mail.Maybe this was widely known to others but I did not know BofA issued 1099’s for bank bonuses, especially ones where you earned miles instead of cash. Thankfully they only valued the miles at a penny each, resulting in a 1099-INT for $250 of “interest income”. I’ve heard of egregious cases in the past where miles/points are valued at $.02 or $.03 cents each and if that were true for this case, it would have resulted in “interest income” of $500 or $750 – Yikes! That would have the potential to seriously derail the value of these promotions.
For other banks, getting 1099-INT’s from Citibank used to be a big concern back in the day but from my understanding they have stopped that practice. I signed up for the Citigold 30k American Airlines offer last year and I have yet to see a 1099-INT (and I am not expecting to). While it is unfortunate Bank of America is issuing these, paying my tax rate on $250 for 25,000 Alaska miles is a still good deal in my book.
Did anyone who else who took advantage of this offer or any other bank bonuses from Bofa (Virgin offer, Business checking promotion, etc.) get a 1099-INT?