Bank Promotions Are Taxed

Key Bank has been known to offer some pretty nice promotions for new customers. Most recently, they’ve offered a free Garmin nuvi GPS unit when you open a new checking account at KeyBank by April 24th, 2009 and fulfill some requirements. The requirements are that you make a debit card transaction plus two direct deposits or automated payments of at least $100 by June 26th, 2009. If you open one of their free checking accounts, you get the Garmin nuvi 205W GPS and if you open a Privilege checking you get the 265WT GPS. You can read the promotional page for exact terms and conditions.

Here’s the fine print you have to check out though (and it’s standard for these types of promotions): The value of the Garmin® GPS will be reported on Form 1099-INT. You will get a 1099-INT of $166 for the nuvi 205W and $240 for the 265WT. For promotions where you get cash, it’s not a big deal, it’s in these scenarios that you have to keep an eye out. It’s because you can buy a Garmin GPS 205W unit for less than $150 on eBay. The 265WT is available for $230. While the price difference isn’t huge in that case, it can be in others.

It may be a better deal for you to buy the unit on its own and opening an account somewhere else!