 TITLE: Are Credit Card Rewards Taxable? CONTENT: Konstantin and Nadezhda Anikeev made headlines earlier this year after the IRS contended they owed taxes on more than $300,000 in Rewards Dollars they earned using American Express cards in 2013 and 2014. When the Anikeevs took the case to court, a judge ruled that most of the rewards were rebates and thus not taxable. However, he determined Rewards Dollars earned from purchasing cash equivalents—buying money orders and reloading reloadable debit cards—_were_ taxable.\nIf you read the fine print of your credit card agreement, chances are you'll notice that cash-equivalent purchases such as money orders and cash advances are excluded from earning rewards. But what about the miles, points or cash back you earn from everyday purchases on rewards credit cards? While the IRS taxes income, these rewards aren't considered to be income. Instead, they're considered to be rebates, discounts or bonuses. While income is taxable, rebates and discounts are not. What about bonuses? Well, that depends.\nIf a credit card requires you to spend a certain amount of money to earn a bonus, then those bonus rewards aren't taxable. For example, if you receive $150 cash back for spending $1,000 in the first three months after account opening, you don't have to declare that $150 as income on your taxes.\nIt's a different situation if you didn't need to do anything to get the rewards. If you automatically get a $150 gift card after being approved for a credit card, with no spending requirement, that $150 bonus is considered income and is taxable.\nWhen you earn a bonus with no spending requirement, the credit card company may even send you a Form 1099-INT or Form 1099-MISC specifying the amount of income you earned. You'll need to report the bonus income on your taxes and submit the tax form to the IRS. Even if you don't receive a tax form from the credit card company, you still need to report this type of bonus as income when you file your tax return, so keep track of any such bonuses you earn. END