Tax on interest refund?

printosaur · ‎02-11-2015

Anyone getting tax notice/1099-C for refunded interest charges? That is, interest charges that were refunded by the credit card issuer?

I am trying to check this out and would appreciate any help. Thanks -

Anonymous · ‎02-11-2015

@printosaur wrote:
Anyone getting tax notice/1099-C for refunded interest charges? That is, interest charges that were refunded by the credit card issuer?
I am trying to check this out and would appreciate any help. Thanks -

I haven't gotten a tax notice, but I don't think it would qualify as a 1099-C as it isn't debt that was forgiven.

Anonymous · ‎02-11-2015

@Anonymous wrote:
@printosaur wrote:
Anyone getting tax notice/1099-C for refunded interest charges? That is, interest charges that were refunded by the credit card issuer?
I am trying to check this out and would appreciate any help. Thanks -
I haven't gotten a tax notice, but I don't think it would qualify as a 1099-C as it isn't debt that was forgiven.

Forgiven debt can be taxed (e.g. student loans), but I don't see the logic behind taxing a reversed interest charge. It is not new money you are getting or debt that is being forgiven. Rather, I would categorize it as something more akin to getting your money back when returning something to the store. With that said, I am no tax expert, and this forum are probably not the best place to ask for tax advice. Hopefully someone can help you since there is some relationship with CCs here, but I doubt too many of us are tax experts.

SunriseEarth · ‎02-11-2015

OP, I've moved your question to the Rebuilding forum, as we likely have a better knowledge base regarding 1099Cs in this section.

SunriseEarth,

Moderator

Anonymous · ‎02-11-2015

The only way it might be considered taxable would be if the refunded interest had been claimed as exempt interest (like mortgage interest) on an itemized return, but I don't think CC interest is claimable is it?

gdale6 · ‎02-11-2015

@Anonymous wrote:
The only way it might be considered taxable would be if the refunded interest had been claimed as exempt interest (like mortgage interest) on an itemized return, but I don't think CC interest is claimable is it?

CC interest is only deductible to the extent of the amount used for business expenses, no personal deduction is allowable.

Anonymous · ‎02-11-2015

@gdale6 wrote:
@Anonymous wrote:
The only way it might be considered taxable would be if the refunded interest had been claimed as exempt interest (like mortgage interest) on an itemized return, but I don't think CC interest is claimable is it?
CC interest is only deductible to the extent of the amount used for business expenses, no personal deduction is allowable.

Yeah, I didn't think it was. I've only ever filed an itemized return once and that was quite a few years ago.

RobertEG · ‎02-11-2015

Is the issue that the creditor refunded the amount because they determined that it was in excess of what you actually owed?