IRS Reporting - Customer Referral Cash Bonuses

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Question:

We have paid cash bonuses to customers for referring friends to us to open a checking account. Do we report this bonus on a 1099MISC as a miscellaneous bonus (for bonuses over $600) or on a 1099I as interest(for bonuses over $25)?

Answer:

It would be considered miscellaneous income and not interest income and as such would be subject to a 1099MISC.

First published on BankersOnline.com 1/21/08