I read the following article on BOL and was wondering: if our bank sponsored a local pumpkin drawing contest open to kids at the local school and the winner of the contest would get a $10.00 savings account at our bank. Would this be reportable on the 1099-INT?




1099 Form - Maximum Dollar Giveaway?
Answer by Andy Zavoina, BOL Guru
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Question: We are a new bank in formation in Oregon. Is there a maximum dollar amount that can used as a giveaway before a 1099 is necessary to be mailed to the customer?

Answer: You have two 1099s to be concerned with. A 1099-MISC is started at $600 and a 1099-INT kicks in at $10. The instructions are linked so you'll know better when each is used. The MISC is for miscellaneous income such as a "reward" for starting direct deposit or referring an account. The INT is used to report interest income. Paying a $10 bonus on a savings account would trigger this and be added to the reportable interest you pay.

First published on BankersOnline.com 10/22/07

Snowgirl:

You haven't gotten a reply so - - - I am deep in reading on this and recommend the "Paying a Bonus on Deposit Accounts" under the downloads section at http://www.bankerscompliance.com