JPMorgan (JPM) updates tax treatment for IBM‑linked notes due May 4, 2028

Rhea-AI Filing Summary

JPMorgan Chase Financial Company LLC amended the Tax Treatment section of the pricing supplement for its Structured Investments Auto Callable Contingent Interest Notes linked to the common stock of International Business Machines Corporation, due May 4, 2028, fully guaranteed by JPMorgan Chase & Co. The amendment (Rule 424(b)(3)) replaces the prior tax disclosure with Annex A, stating the issuer intends to treat the notes as prepaid forward contracts with associated contingent coupons for U.S. federal tax purposes and to treat Contingent Interest Payments as ordinary income.

The issuer and its special tax counsel note alternative tax treatments may be reasonable and that future Treasury/IRS guidance (including the 2007 notice) or Section 871(m) matters could materially affect tax outcomes. The amendment states withholding agents will generally withhold at 30% on Contingent Interest Payments to Non-U.S. Holders absent appropriate Form W-8 documentation, and that the issuer will not pay additional amounts for taxes withheld.

Insights

Tax Counsel Specialist

Annex A restates a conservative issuer tax position but flags IRS uncertainty and potential withholding risks for non-U.S. holders.

The issuer, relying on special tax counsel, intends to treat the notes as prepaid forward contracts with contingent coupons; Contingent Interest Payments are treated as ordinary income for U.S. holders. This is a disclosed position, not a binding ruling, and alternative treatments may exist.

The amendment highlights regulatory risk from Treasury/IRS guidance and Section 871(m) complexity; it also confirms expected withholding at 30% on Contingent Interest Payments to Non-U.S. Holders absent proper documentation. Subsequent guidance or IRS challenge could change timing, character, or withholding outcomes.

Fixed-Income Structurer

Issuer clarifies tax reporting approach for structured notes and warns of potential retroactive changes affecting holders.

The amendment specifies the intended U.S. federal tax treatment and cites reliance on counsel Davis Polk & Wardwell LLP. It notes the 2007 Treasury/IRS notice on prepaid forwards and possible future regulations that may require accrual or change characterization.

For Non-U.S. Holders, the amendment anticipates withholding practice at 30% on Contingent Interest Payments unless treaty documentation applies. Holder tax outcomes and net receipts depend on withholding agent practice and any later IRS positions or Treasury regulations.

Key Figures

Registration numbers: 333-293684 and 333-293684-01 Maturity date: May 4, 2028 Pricing supplement date: April 30, 2026 +3 more

6 metrics

Registration numbers 333-293684 and 333-293684-01 Registration Statement Nos. referenced on amendment

Maturity date May 4, 2028 Notes due date

Pricing supplement date April 30, 2026 Pricing supplement being amended

Product supplement / prospectus date April 17, 2026 Related product supplement and prospectus dates

Withholding rate <percent>30%</percent> Expected withholding on Contingent Interest Payments to Non‑U.S. Holders

CUSIP 46660TGZ7 Security identifier in amendment

Key Terms

prepaid forward contracts, Contingent Interest Payments, Section 871(m), Form W-8, +1 more

5 terms

prepaid forward contracts financial

"treat the notes for U.S. federal income tax purposes as prepaid forward contracts"

Contingent Interest Payments financial

"any Contingent Interest Payments as ordinary income"

Contingent interest payments are interest amounts a borrower only pays if certain conditions are met, such as hitting revenue targets, completing a sale, or reaching a cash threshold. For investors, these payments change the timing and size of expected cash flows—like a loan whose extra charges kick in only if a business performs a certain way—so they affect risk, valuation and how much cash a company has available for growth or dividends.

Section 871(m) regulatory

"Section 871(m) of the Code and Treasury regulations promulgated thereunder"

A U.S. tax rule that treats certain payments from financial contracts (like options, swaps, and other instruments that mimic stock dividends) to non-U.S. investors as if they were direct dividends, requiring U.S. withholding tax. It matters to investors because it can reduce net returns on offshore trades that replicate U.S. equity income and may change pricing or counterparty behavior—think of it as a hidden sales tax that applies when a substitute payment acts like a dividend.

Form W-8 regulatory

"if an applicable Form W-8 is provided"

delta of one financial

"do not have a delta of one with respect to underlying securities"

AI-generated analysis. How Rhea-AI works. Not financial advice.

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Accepted by SEC EDGAR 05/06/2026 - 08:08 PM Learn about SEC filing dates

FAQ

What tax position does JPMorgan state for the notes (JPM)?

The issuer intends to treat the notes as prepaid forward contracts with associated contingent coupons, and Contingent Interest Payments as ordinary income for U.S. holders. This is a stated position based on special tax counsel, not an IRS ruling.

Will Non-U.S. holders face withholding on payments for JPM notes?

Withholding agents are expected to withhold at 30% on Contingent Interest Payments to Non-U.S. Holders absent valid Form W-8 or treaty claim. The issuer will not pay additional amounts for taxes withheld.

Does Section 871(m) apply to these IBM-linked notes (JPM)?

The issuer and special tax counsel believe Section 871(m) should not apply to the notes based on their determinations, but they acknowledge the IRS could disagree. Section 871(m) analysis depends on specific facts and other transactions.

Could future Treasury/IRS guidance change the tax treatment?

Yes. The amendment cites a 2007 Treasury/IRS notice on prepaid forwards and warns that future regulations or guidance could materially affect tax timing, character of income, and possibly have retroactive effect.

May 6, 2026 Registration Statement Nos. 333-293684 and 333-293684-01; Rule 424(b)(3)
Amendment no. 1 to pricing supplement dated April 30, 2026 to product supplement no. 3-I dated April 17, 2026 and the prospectus and
prospectus supplement, each dated April 17, 2026
JPMorgan Chase Financial Company LLC
Structured Investments
Auto Callable Contingent Interest Notes Linked to the Capital
Stock of International Business Machines Corporation due
May 4, 2028
Fully and Unconditionally Guaranteed by JPMorgan Chase & Co.
The section entitled “Tax Treatment” in the pricing supplement dated April 30, 2026, related to the notes referred to
above (the “pricing supplement”), is amended, restated and superseded in its entirety by the section entitled “Tax
Treatment” in Annex A to this amendment.
CUSIP: 46660TGZ7
Investing in the notes involves a number of risks. See “Risk Factors” beginning on page S-2 of the accompanying
prospectus supplement, “Risk Factors” beginning on page PS-12 of the accompanying product supplement and
“Selected Risk Considerations” beginning on page PS-5 of the pricing supplement.
Neither the Securities and Exchange Commission (the “SEC”) nor any state securities commission has approved or disapproved
of the notes or passed upon the accuracy or the adequacy of this amendment, the pricing supplement or the accompanying
product supplement, prospectus supplement and prospectus. Any representation to the contrary is a criminal offense.
The notes are not bank deposits, are not insured by the Federal Deposit Insurance Corporation or any other governmental agency
and are not obligations of, or guaranteed by, a bank.
You should read this amendment together with the pricing supplement and the related product supplement, prospectus
supplement and prospectus, each of which can be accessed via the hyperlinks below. Please also see “Additional Terms Specific
to the Notes” in the pricing supplement.
• Pricing supplement dated April 30, 2026:
http://www.sec.gov/Archives/edgar/data/19617/000121390026051027/ea0288753-01_424b2.htm
• Product supplement no. 3-I dated April 17, 2026:
http://www.sec.gov/Archives/edgar/data/19617/000121390026045198/ea0285802-20_424b2.pdf
• Prospectus supplement and prospectus, each dated April 17, 2026:
http://www.sec.gov/Archives/edgar/data/19617/000095010326005889/crt_dp245141-424b2.pdf

PS-1 | Structured Investments
Auto Callable Contingent Interest Notes Linked to the Capital Stock of
International Business Machines Corporation
Annex A
Tax Treatment
You should review carefully the section entitled “United States Federal Taxation” in the accompanying prospectus supplement. In
determining our reporting responsibilities we intend to treat (i) the notes for U.S. federal income tax purposes as prepaid forward
contracts with associated contingent coupons and (ii) any Contingent Interest Payments as ordinary income, as described in the section
entitled “United States Federal Taxation — Tax Consequences to U.S. Holders — Program Securities Treated as Prepaid Financial
Contracts with Associated Coupons” in the accompanying prospectus supplement. Based on the advice of Davis Polk & Wardwell LLP,
our special tax counsel, we believe that this is a reasonable treatment, but that there are other reasonable treatments that the IRS or a
court may adopt, in which case the timing and character of any income or loss on the notes could be materially affected. In addition, in
2007 Treasury and the IRS released a notice requesting comments on the U.S. federal income tax treatment of “prepaid forward
contracts” and similar instruments. The notice focuses in particular on whether to require investors in these instruments to accrue
income over the term of their investment. It also asks for comments on a number of related topics, including the character of income or
loss with respect to these instruments and the relevance of factors such as the nature of the underlying property to which the
instruments are linked. While the notice requests comments on appropriate transition rules and effective dates, any Treasury
regulations or other guidance promulgated after consideration of these issues could materially affect the tax consequences of an
investment in the notes, possibly with retroactive effect. The discussions above and in the accompanying prospectus supplement do
not address the consequences to taxpayers subject to special tax accounting rules under Section 451(b) of the Code. You should
consult your tax adviser regarding the U.S. federal income tax consequences of an investment in the notes, including possible
alternative treatments and the issues presented by the notice described above.
Non-U.S. Holders — Tax Considerations. The U.S. federal income tax treatment of Contingent Interest Payments is uncertain, and
although we believe it is reasonable to take a position that Contingent Interest Payments are not subject to U.S. withholding tax (at least
if an applicable Form W-8 is provided), it is expected that withholding agents will (and we, if we are the withholding agent, intend to)
withhold on any Contingent Interest Payment paid to a Non-U.S. Holder generally at a rate of 30% or at a reduced rate specified by an
applicable income tax treaty under an “other income” or similar provision. We will not be required to pay any additional amounts with
respect to amounts withheld. In order to claim an exemption from, or a reduction in, the 30% withholding tax, a Non-U.S. Holder of the
notes must comply with certification requirements to establish that it is not a U.S. person and is eligible for such an exemption or
reduction under an applicable tax treaty. If you are a Non-U.S. Holder, you should consult your tax adviser regarding the tax treatment
of the notes, including the possibility of obtaining a refund of any withholding tax and the certification requirement described above.
Section 871(m) of the Code and Treasury regulations promulgated thereunder (“Section 871(m)”) generally impose a 30% withholding
tax (unless an income tax treaty applies) on dividend equivalents paid or deemed paid to Non-U.S. Holders with respect to certain
financial instruments linked to U.S. equities or indices that include U.S. equities. Section 871(m) provides certain exceptions to this
withholding regime, including for instruments linked to certain broad-based indices that meet requirements set forth in the applicable
Treasury regulations. Additionally, a recent IRS notice excludes from the scope of Section 871(m) instruments issued prior to January
1, 2027 that do not have a delta of one with respect to underlying securities that could pay U.S.-source dividends for U.S. federal
income tax purposes (each an “Underlying Security”). Based on certain determinations made by us, our special tax counsel is of the
opinion that Section 871(m) should not apply to the notes with regard to Non-U.S. Holders. Our determination is not binding on the
IRS, and the IRS may disagree with this determination. Section 871(m) is complex and its application may depend on your particular
circumstances, including whether you enter into other transactions with respect to an Underlying Security. You should consult your tax
adviser regarding the potential application of Section 871(m) to the notes.
In the event of any withholding on the notes, we will not be required to pay any additional amounts with respect to amounts so withheld.