Of course, if a business entity earns rewards using company credit cards that it redeems and shares with its employees, the taxability question may be different.
Am I under some obligation to report them as income?
Looks like I'll be going bargain clothing shopping again in the near future in about 1-3 weeks when they arrive.
Although not precisely addressing the issue of credit cards rewards,.There is no definitive ruling from the IRS on the subject, but several things suggest the IRS would not consider cash back taxable income.The 2002 IRS Private Letter Ruling on Credit Card Rebates.I also redeemed 40,000 of my total balance of 46,155.While the rewards received by the business is likely to be viewed as non-taxable, once the rewards are passed onto the employees, their character is likely to change.Many credit card agreements prohibit such purchases, however.Reviewing the IRS' Likely Position On The Taxation Of Cash Back Credit Card Rebates and Rewards.
Nonetheless, private letter rulings are useful as indications of how the IRS views a particular tax issue.
Income you get from a qualified scholarship is normally not taxable.
What is a private letter ruling?Their assessment is more likely in tune with the position the IRS would likely take as well.If, however, the sign-up bonus for your credit card does not require that you make any purchases or charge any amount to your card, then you are likely to receive a 1099-misc tax form in the mail in conjunction with the bonus.Any future guidance on the taxability of these benefits will be applied prospectively.But recently I've been amazon 10 off coupon mastercard thinking - these rebates, rewards, and gift cards I've been earning and redeeming do add up to quite a substantial sum.Over the years, I've earned quite a tidy sum of credit card rewards comprised of cash back, rebate points, airline miles, and gift cards.Types of common credit card rewards that are not counted as income include cash-back programs, travel miles bonuses, accumulated points towards future purchases and credit card sign-up bonuses that require a financial transaction to be realized.The agency announced that it would not treat the miles as taxable, but explicitly reserved ruling where the travel rebate was in the form of cash: The IRS will not assert that any taxpayer has understated his federal tax liability by reason of the receipt.