Charged Federal Interest on new Chase Disney Checking Account?

[chabs]

I opened up a Chase checking account to get the $150 bonus and Disney debit card. Today I received my $150 bonus and $42 was taking out for federal interest. Is this correct? I can't imagine that 1/3 of my bonus money has to be taken out for interest. That seems awful high.

 

[EMAW_KSU]

I opened up a Chase checking account to get the $150 bonus and Disney debit card. Today I received my $150 bonus and $42 was taking out for federal interest. Is this correct? I can't imagine that 1/3 of my bonus money has to be taken out for interest. That seems awful high.

What is Federal Interest?

 

[chabs]

Got me? That's why I asked! That's what it says next to the $42 debit after my deposit.

 

[LadyBeBop]

It's withholding, and I believe Chase has to take it out at the 28% tax bracket. Apparently, you have to claim the bonus as income on your 2012 tax return. However, you can also claim the $42 as withholding.

Save the information. You may have to include it with your tax return next year to claim the withholding.

 

[scrapquitler]

That $150 counts as interest income, and the $42 they took out is income tax witholding. Just the same as you pay income tax on the interest earned on your savings account, this is witheld and at the end of the year you will get a 1099 (unless they already gave you the form) and you have to add that in when you do your federal income taxes.

 

[delmar411]

There should have been an option for them to not withhold it and just let you deal with it at tax time.

I'd give them a call and ask about it.

 

[DawnM]

I have done up to a $400 bonus on a CC and have NEVER had money withheld.

Dawn

 

[jessrose18]

yeah i dont get it.... i thought you should get the 150 and then youclaim the 150 on your tax return at the end of the year hmmmmmm..

I got a letter from usbank last week saying they will give me 150 if i open a checking account with them still thinking about it, hope they dont take out money for taxes

 

[North of Mouse]

I opened up a Chase checking account to get the $150 bonus and Disney debit card. Today I received my $150 bonus and $42 was taking out for federal interest. Is this correct? I can't imagine that 1/3 of my bonus money has to be taken out for interest. That seems awful high.

Wow, never heard of that. Wonder if it's something new? They've never taken anything out of mine or DH, and it was more than that That's a bummer

 

[chabs]

I sent them an email asking me to give me my money back and letting me deal with it at tax time. I'll post what they say. They never gave me an option to opt out or anything-it just showed up as a debit right after the deposit.

 

[luvmy3]

I sent them an email asking me to give me my money back and letting me deal with it at tax time. I'll post what they say. They never gave me an option to opt out or anything-it just showed up as a debit right after the deposit.

Did you read all the terms when you signed up for the account. I can't imagine they can (legally) not inform you.

 

[MomToOne]

Bonuses on checking and savings accounts are taxable since they are considered income.

Bonuses on credit cards are not taxable, they are considered rebates of fees. (That's why you usually get the bonus after spending $x, etc.)

 

[RitaE]

There is usually a form (or a section on one of the forms or pages when you open online) where you check "I'm not subject to back-up withholding" I think it is the W-9?

Unless you get that filled out the bank has to do the back-up withholding.

 

[bettymae1121]

I got a $150 bonus from Chase two different times for opening an account but they didn't withhold the taxes, I just got a 1099 at tax time and had to claim it as income so it was taxed when I filed.

 

[Fire14]

I got a $150 bonus from Chase two different times for opening an account but they didn't withhold the taxes, I just got a 1099 at tax time and had to claim it as income so it was taxed when I filed.

This was how mine was also got 1099 and had to claim bonus money as income

 

[disney1990]

I got a $150 bonus from Chase two different times for opening an account but they didn't withhold the taxes, I just got a 1099 at tax time and had to claim it as income so it was taxed when I filed.

Me too.

 

[Bell30012]

Maybe it is different in other states or areas but Chase didn't withhold anything from my reward.

 

[chabs]

They are supposed to be sending me a form to fill out so that I can get my money back. We don't have a Chase branch around us, so I opened the account online. There could have been something in the very fine print, but I didn't see it nor did I see any forms to opt out.

 

[Where'sPiglet?]

One of my savings accounts withholds the tax every month on the interest. It's absolutely ridiculous. For example, I get 40 cents and they'll withhold 12 cents of that.

 

[mom2alix]

This is backup withholding. It sounds like you missed checking the box on the W-9 saying you weren't subject to it. Here's a link with more explanation:
http://www.irs.gov/taxtopics/tc307.html