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1099 from Lucid for reward purchases

DrK

DrK

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The 2025 ‘Big Beautiful Bill’ eliminates the obligation for any company to create a 1099-MISC for referral rewards point purchases $600 ( for Lucid points lucid values at $0.125 per point).

The government realized that the cost of processing for all ( (government, issuers and consumers) far outweighs the return.

Has Lucid stopped their policy? If you spent all points allowed by Lucid you would not cross the new reporting threshold.
 
For clarification 600 per person per year or per transaction ?
 
skomarla said:
For clarification 600 per person per year or per transaction ?
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Per person, per year. Expect Lucid to generate a 1099-MISC for anyone spending the $0.125 per point equivalent of $600 this year, including sales tax. Barring changes to the current tax code, the reporting threshold will rise to $2,000 next year.
 
Bottom line: the cost for me and most other purchasers of the Gravity $$$ is more annoyance.

For anyone expending the car the whole process of using points really generates expense, bureaucratic expense.

The key is actually how LUCID values these points at more than retail when in fact they can value them as a discount or at the goods wholesale cost to them.



Section 70432 in the IRS.gov website
may or may not be the section related to our question.

One, Big, Beautiful Bill provisions | Internal Revenue Service

The One, Big, Beautiful Bill Act has a significant effect on your taxes, credits and deductions.
www.irs.gov www.irs.gov
“It was signed into law on July 4, 2025, as Public Law 119-21.

These provisions go into effect in 2025:”

I[they mean tax year 2025]

Reporting threshold​

Third party settlement organizations (TPSOs) (payment apps and online marketplaces) are required to report payments on Form 1099-K when the total amount of payments you receive for goods or services through the platform exceeds $20,000 in more than 200 transactions. You may receive a Form 1099-K even when total payments or transactions are less than the reporting threshold

www.irs.gov

Understanding your Form 1099-K | Internal Revenue Service

Form 1099-K reports payments from payment apps or online marketplaces and from credit, debit or stored-value cards. Use it to help figure and report your correct income on your tax return.
www.irs.gov www.irs.gov

Further

If the gross payment amount is incorrect​

Report the amount from your incorrect Form 1099-K in the entry space at the top of Schedule 1 (Form 1040), Additional Income and Adjustments to Income PDF.

The topper is that Lucid over values its points!

If the gross payment amount is incorrect​

Report the amount from your incorrect Form 1099-K in the entry space at the top of Schedule 1 (Form 1040), Additional Income and Adjustments to Income PDF.
 
DrK said:

Reporting threshold​

Third party settlement organizations (TPSOs) (payment apps and online marketplaces) are required to report payments on Form 1099-K when the total amount of payments you receive for goods or services through the platform exceeds $20,000 in more than 200 transactions. You may receive a Form 1099-K even when total payments or transactions are less than the reporting threshold

www.irs.gov

Understanding your Form 1099-K | Internal Revenue Service

Form 1099-K reports payments from payment apps or online marketplaces and from credit, debit or stored-value cards. Use it to help figure and report your correct income on your tax return.
www.irs.gov www.irs.gov

Further

If the gross payment amount is incorrect​

Report the amount from your incorrect Form 1099-K in the entry space at the top of Schedule 1 (Form 1040), Additional Income and Adjustments to Income PDF.

The topper is that Lucid over values its points!

If the gross payment amount is incorrect​

Report the amount from your incorrect Form 1099-K in the entry space at the top of Schedule 1 (Form 1040), Additional Income and Adjustments to Income PDF.
Click to expand...

You can't go by that $20k reporting threshold, as it applies to third party settlement organizations (TPSOs) who generate 1099-Ks... Not the 1099-MISCs that apply to the Lucid Store transactions.
 
1- I have made a mountain out of a pimple.

I am sorry that I have taken other people’s time.

For one no matter reporting threshold tax is owed.

No matter what the whole process costs more than the benefit.

Most important: lucid set this up and lucid should have had a warning: consult your tax advisor at the least.
 
DrK said:
1- I have made a mountain out of a pimple.

I am sorry that I have taken other people’s time.

For one no matter reporting threshold tax is owed.

No matter what the whole process costs more than the benefit.

Most important: lucid set this up and lucid should have had a warning: consult your tax advisor at the least.
Click to expand...
No worries @DrK! I most certainly agree with you questioning why Lucid would apply such a high dollar per point value to their 1099-MISCs. The good news about self-reporting is that you could determine whatever dollar per point value you feel is appropriate.
 
It’s all good.

Nonetheless I don’t consider 600 to be difficult to reach. An LCHS is $1200 and 8900 points. In 2025 two-ish referrals would collect that many points. Many other things are useful like the mobile charger, Roof rails etc that do add up.

I personally got maxed out but I don’t have much i want unless they add the CCCv2 update or wheel packages.
 
DrK said:
No matter what the whole process costs more than the benefit.
Click to expand...
Genuine question: how? At maximum, you get a 1099 and have to pay some percentage tax on whatever it is you acquired. That percentage is not going to be 100%, no matter your income level, so it can never even be *as much as* buying the accessory in cash. It will always be significantly cheaper, albeit not free if it’s above $600 (or $2000 next year).

How does it “cost more”?
 
borski said:
Genuine question: how? At maximum, you get a 1099 and have to pay some percentage tax on whatever it is you acquired. That percentage is not going to be 100%, no matter your income level, so it can never even be *as much as* buying the accessory in cash. It will always be significantly cheaper, albeit not free if it’s above $600 (or $2000 next year).

How does it “cost more”?
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There is no point in bringing federal and state tax into the equation. If we are talking about an item that costs $100 (including tax and shipping) on the $$$ store, it makes no sense to assign it a value higher than $100 (including tax and shipping) for 1099-MISC purposes. What would the rationale be? I can see an argument for not assigning it a value lower than $100, but certainly not a higher value.
 
Buffalo Bob said:
There is no point in bringing federal and state tax into the equation. If we are talking about an item that costs $100 (including tax and shipping) on the $$$ store, it makes no sense to assign it a value higher than $100 (including tax and shipping) for 1099-MISC purposes. What would the rationale be? I can see an argument for not assigning it a value lower than $100, but certainly not a higher value.
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I agree with you, but… I don’t think they do? LCHCS is $1200 cash or $1112.50 in points for example. I haven’t checked every item, but I don’t think their goal was to make it higher than cash.
 
borski said:
I agree with you, but… I don’t think they do? LCHCS is $1200 cash or $1112.50 in points for example. I haven’t checked every item, but I don’t think their goal was to make it higher than cash.
Click to expand...

The LCHCS is a notable exception, as I pointed out when I groused about the recent NACS to CSS adapter points issue, which I was happy to see Lucid correct so readily. There are a few others. The fair thing to me is to uniformly base the 1099-MISC income on an equitable trade-off between a points purchase and a $$$ purchase. Neither higher nor lower, within reason. I'm not talking about rounding a bit one way or another.
 
Buffalo Bob said:
The LCHCS is a notable exception, as I pointed out when I groused about the recent NACS to CSS adapter points issue, which I was happy to see Lucid correct so readily. There are a few others. The fair thing to me is to uniformly base the 1099-MISC income on an equitable trade-off between a points purchase and a $$$ purchase. Neither higher nor lower, within reason. I'm not talking about rounding a bit one way or another.
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Okay, we agree. I suspect the math for anything higher wasn’t done that way intentionally, as evidenced by it being corrected for the adapter. They should look through the whole store and even it out.
 
In my opinion, it does not make a whole lot of sense to buy accessories from Lucid store using points if you are to pay taxes on them. We discussed this with Borski before, my thought was that you can purchase most (but not all) accessory items outside Lucid for a lot less (the outside cash price will be comparable to the tax value you pay in Lucid store). The good news is that starting January '26 spending limit of the tax free purchases using points goes up to $2,000. I have maxed out the $600 limit this year and am just waiting to place a point purchase of few items close to $2,000 in January '26.
 
SoCal_AirTouring said:
In my opinion, it does not make a whole lot of sense to buy accessories from Lucid store using points if you are to pay taxes on them.
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Why not? Even the highest federal tax bracket in the US is 37%, and even for ppl buying a luxury vehicle like Lucids, I doubt very many ppl here are making that much. I suspect most people here are in the 24% or lower range.

So unless you can find an item for less than 24% of the value of the points for it, you'll still come out ahead using the rewards points. (Not accounting for state taxes, as we don't have any in Texas).
 
Are we still obligated to fill out the W-9 if we paid sales tax on the items? I recall being charged sales tax (in rewards points).

Also, are you only asked to fill out a W-9 if you exceeded the $600 limit, or is everyone who used rewards points being asked?
 
GMan said:
Are we still obligated to fill out the W-9 if we paid sales tax on the items? I recall being charged sales tax (in rewards points).

Also, are you only asked to fill out a W-9 if you exceeded the $600 limit, or is everyone who used rewards points being asked?
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It's not about sales tax.

It's about INCOME tax.

If you don't participate in the referral program, you wouldn't get any rewards that can be considered as income, then there's no need for W-9.
 
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