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Robin D.
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Experience:  15years with H & R Block. Divisional leader, Instructor
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1099-INT ($ 25) from Bank of America -- GA 500 Tax Form

Resolved Question:

I am filing my state tax for Georgia. I have already sent my federal tax. Now, I have 2 W-2 forms which form the total salary / wages for me during the year 2009. I also got a form 1099-INT from Bank of America. This is for $25 reward / referral gift. That is what is mentioned on the 1099-INT. While filing Federal tax, the 1099-INT was shown as non-taxable. But, the GA 500 form has on Page 6 : i> Wages / Salary ii> Interests & Dividends iii> and so on. The Tax Accountant at my school told me that I do not have to write $ 25 in Interests and Dividends section of GA 500 form. He said I can write if I want but should remove it from adjusted Gross income. I am confused as to whether I should mention about 1099-INT in GA 500 for that $25 or I should not mention. If I mention the $25 it will be considered as taxable income. Can someone please help me in this ? Should I just ignore the 1099-INT form from Bank of America or include it and write about it in the GA 500 form ? How should I mention and adjust the income on the form in that case ?
Submitted: 4 years ago.
Category: Tax
Expert:  Robin D. replied 4 years ago.

Hello and thank you for using Just Answer.

I must disagree with your accountant friend.

In addition to paying cash interest, a financial institution may provide a "gift" (also referred to as a premium or a bonus) as an inducement to a customer either to open a deposit account or to add to an existing account. Such gifts are also considered interest, the fair market value of which may need to be reported. The IRS does consider certain de minimis or very small noncash gifts to be free of tax and not subject to reporting on Form 1099-INT, under Revenue Procedure 2000-30.

The Form 1099-INT, sent after year-end to the customer and to the IRS, will be the customer's only notice that the gift is taxable income.

 

If you look in the fine print you will most probably find that this amount will be reported to the IRS as with their America at work participants Plan.

This amount is taxable to you as interest. I do not know how you removed it from your federal but it is considered interest.

It is needed on your Ga return and should have been shown on the federal return also.

Customer: replied 4 years ago.

Thank you for your reply.

 

I filed my federal return online using GLACIER system. When I put the 1099-INT details, the $ 25 was shown as non-taxable and hence not included in total wages / earnings.

 

In my GA 500, should I mention $ 25 now as Interest / Dividends and add it to the total earnings / wages ? My refund amount is still the same and does not change due to this ?

Expert:  Robin D. replied 4 years ago.
Yes, list the amount on the GA return. I am still surprised that the amount credited to you was not included as interest. The only thing I can surmize is that the $25 is contengent on you keeping your account and will not be taxable until the time limit is met. Since you basically do not have access to the amount then that could account for the non taxable classification.
Customer: replied 4 years ago.
Is it because I am an international student and fall under category of Non-Resident Alien, the income is non-taxable ?
Expert:  Robin D. replied 4 years ago.

Oh well you left that part out. I didn't even go there. I don't know why since my last 10 questions were from international students.

Interest earned by a non resident is considered foreign source (go figure???) and there for not taxable to you.



Edited by Robin D on 4/14/2010 at 7:16 PM EST
Customer: replied 4 years ago.

Oh ok. Thanks for ur reply.

 

So, I basically do no need to mention $ 25 anywhere right. I can just simply ignore it now ?? Am I correct ?

Expert:  Robin D. replied 4 years ago.
You are welcome. You do not need to report the amount

Edited by Robin D on 4/14/2010 at 7:28 PM EST
Customer: replied 4 years ago.

So, I basically do no need to mention $ 25 anywhere right. I can just simply ignore it now ?? Am I correct ?

Expert:  Robin D. replied 4 years ago.
Yes you can leave it off since it was not taxable to federal . If it shows on the GA then mark it as non taxable as well.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7459
Experience: 15years with H & R Block. Divisional leader, Instructor
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