WalletHub, Financial Company
Credit card signup bonuses are not taxable if you need to spend money to earn the reward. The only time a credit card welcome bonus would be considered taxable income is if it is awarded automatically, with no purchase necessary.
For example, you could get a bonus just for opening the account. Such bonuses are rare, but must be reported on taxes. Other examples include bonuses you get for referring other people to a card, as well as anniversary bonuses on cards that don’t require you to pay an annual fee.
However, the vast majority of credit card bonuses require the cardholder to spend money to earn them – $1,000 in the first 3 months, for example. Because of that spending requirement, the bonuses are considered to be rebates or discounts on purchases, which are not taxable. This is the same reason that regular credit card rewards on purchases are not taxable, either.
Paying Taxes on Rewards
If your credit card signup bonus is taxable based on having no spending requirement, you might receive IRS Form 1099-INT or Form 1099-MISC from the credit card company. But even if you don’t receive one of these forms after getting a credit card bonus without spending any money, you should still report that income on your taxes anyway.
Depending on your situation, you might also want to speak with a certified public accountant. It’s better to be safe than sorry when it comes to taxes.
Citi Premier® Card
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