Do I have to pay taxes on credit card rewards?

June1

I may already be paying some fees to the credit card company or interest for which I am not really getting any tax break. So if the credit card gives me some rewards, or cash back…its just like they are giving me discount on money I am already paying them. It shouldn’t be thought of as extra income on which I need to pay state and federal taxes.

posted under rewards cards
6 Comments to

“Do I have to pay taxes on credit card rewards?”

  1. Avatar June 1st, 2010 at 11:34 am Chase Says:

    only if its worth more than 2000 dollars
  2. Avatar June 1st, 2010 at 11:41 am sarge927 Says:

    Nope. Any discounts you get from credit cards are part of the contract between you and the credit card company. They’re considered “incentives,” not income.
  3. Avatar June 1st, 2010 at 12:35 pm curious1223 Says:

    This falls in the “gifts” category. Check the IRS code for that. I believe there is an allowable amount that is tax-free (and $2000 stated by the other answerer sounds right)
  4. Avatar June 1st, 2010 at 12:53 pm linluv2001 Says:

    No you do not.
  5. Avatar June 1st, 2010 at 1:30 pm Wayne Z Says:

    No, if it is a personal credit card.

    Yes, if it is a business credit card used to purchase items for the business.
  6. Avatar June 1st, 2010 at 2:22 pm scottakrohn Says:

    Only if you have deducted the interest as a business expense.