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No, credit card rewards are not taxable in most cases. The IRS views credit card rewards the same way they view discounts, and discounts aren’t taxable. Rewards credit cards give points, cash back, or miles on purchases, which you can then redeem for statement credits, gift cards, merchandise, and travel expenses. Because of that, it’s like you’re getting a small discount every time you make a purchase.
Types of Rewards & Taxation
Signup bonuses:
Many credit cards offer a signup bonus for new cardholders that is awarded once they meet a minimum spending requirement. For example, you might get $150 for spending $500 within the first three months of account opening. If you receive a signup bonus for meeting a spending requirement, that bonus is not taxable.
However, if you receive a bonus without meeting any spending requirement, then it is considered taxable income. To make it simple, if you’ve done nothing in exchange for the rewards, they’re considered taxable.
Anniversary and referral bonuses:
Some anniversary bonuses require that you spend a certain amount each year to receive the bonus, or renew the card by paying the annual fee. In these cases, an anniversary bonus clearly falls into the “not taxable” category.
Referral bonuses, on the other hand, likely will be considered taxable income. American Express and Chase even send out a Form 1099-MISC to file with the IRS after cardholders earn referral bonuses.
Business credit card rewards:
Business credit card rewards differ slightly in terms of whether they’re taxable or not. While the actual rewards you get from your business credit card aren’t taxable, the IRS will expect you to subtract them from the business expenses you report. You’ll have to consider the rewards as discounts on your business expenses, which will reduce the amount you’re able to deduct on your taxes.
To sum things up, the only times you have to be concerned about credit card rewards and taxes are if you have a business credit card, or you receive a bonus without doing anything to get it. Other than that, you can enjoy the rewards you earn without a second thought.
Popular Rewards Credit Cards in May 2026 from Our Partners
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Everyday Cash Back
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Bonus Miles
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Bonus Points
People also ask
What credit card company has the best rewards?
The credit card company with the best rewards is Capital One, according to WalletHub’s 2024 Credit Card Rewards Study. Capital One took the top spot in the study for the eighth year in a row, earning an overall score of 92% with high rankings in key categories such as earning potential and rewards-earning policies. Below, you can see how all the major issuers fared in WalletHub’s study.
Credit Card Companies with the Best Rewards
| ... | WalletHub Score | Popular Credit Card |
What is reward redemption?
Reward redemption is how you use the points, miles, or cash back earned on your credit card. You can usually redeem rewards online or by calling your issuer. Options may include travel, statement credits, gift cards, and more—though value can vary.
Some credit cards have specific rules for redeeming rewards— you might need to meet a minimum balance, redeem in set increments, or even wait for an annual payout, like with the Costco Anywhere Visa® Card by Citi. Since...
read full answer by Maria Adams, Credit Cards ModeratorHow much are Visa rewards points worth?
Visa rewards points are worth around 1 cent each, on average, depending on the specific credit card and how you redeem the points. While Visa itself doesn't issue rewards, many credit cards on the Visa network do—through banks and credit unions that manage their own rewards programs.
Point Values for Popular Visa Credit Cards
| Visa Credit Card | Issuer | Point Value | ... |
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