Are cashback rewards for credit cards taxable income if I received a 1099-misc?.

Forum|Forum|6 years ago
June 6, 2019
4 replies
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This is the first year I have received a 1099-misc for credit card cashback even though I have received similar cashback rewards for this same card for 10-12 years. My concern is even if they are not taxable income I will increase my audit chances since I have received a 1099 form for them.

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Best answer by Hal_Al

The simple answer is: if you got a 1099-Misc, it's taxable.

There was, apparently, something about your rewards that was different from the general credit card rewards, which are viewed by the IRS as a discount, not income.

Lisa995

Employee

Are they in box 3 of the 1099MISC? IRS will be expecting to see it on your return...whether or not its enough to make a tax difference large enough for IRS to care, is a different matter.

♪♫•*¨*•.¸¸♥Lisa♥ ¸¸.•*¨*•♫♪

macuser_22

Employee

It depends. Usually cash back is simply a rebate of yiur own money and is not taxable since you are just getting some of your own back that you already paid tax on. But some "cash back" includes other offers that are not rebates which can be taxable.

Here's an article about that.
<a rel="nofollow" target="_blank" href="https://www.investopedia.com/ask/answers/110614/are-credit-card-rewards-considered-taxable-income-irs.asp">https://www.investopedia.com/ask/answers/110614/are-credit-card-rewards-considered-taxable-income-irs.asp</a>

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

Hal_AlAnswer

Employee

The simple answer is: if you got a 1099-Misc, it's taxable.

There was, apparently, something about your rewards that was different from the general credit card rewards, which are viewed by the IRS as a discount, not income.

Helen123

@Hal_Al @macuser_22 Hi, one quick question. I understand that in general, credit card cash back is not taxable. Therefore, if I do not receive 1099 form from credit card company and related institution, can I assume that I do not need to report any credit card cash back because they are not taxable?

Thanks

Hal_Al

Employee

Q. If I do not receive 1099 form from credit card company and related institution, can I assume that I do not need to report any credit card cash back because they are not taxable?

A. Yes.

Anonymous

is the credit card business related? the IRS has ruled that in general cash backs / rebates are not taxable. however, sometime there can be awards for new credit cards or certain features that you apply for and get a reward that is not really a rebates and is taxable.