【Updated 2025.7】Under the latest law, Form 1099-MISC will only be issued when the amount exceeds $2,000. This change will take effect in 2026, which means that for tax year 2025, the old threshold of more than $600 still applies. In other words, ordinary refer bonuses generally will not generate a tax form, since they rarely exceed $2,000. Of course, not receiving a tax form does not mean the income is not taxable—you still need to report this additional income yourself.

"Disclaimer" I do not have professional tax expertise. The content below comes from the IRS website, online analysis, and my own analysis. If you need to file taxes, please consult a professional attorney.

About Filing Taxes

You have probably heard the famous saying: In this world nothing can be said to be certain, except death and taxes. This is especially true in the United States. Whether you make a little money, win a big prize, buy a house, or replace your car, you generally need to pay some tax to the U.S. government. For most readers here, the biggest question is whether the rewards we earn—cash back, miles, and so on—also have to be shared with the government through taxation. Today I’ll summarize some of the information I know.

Basic Tax-Filing Knowledge in the U.S.

Every year from January to March is tax season in the United States. By filing taxes, we calculate our income and expenses from the previous year, determine how much tax we owe, compare that with the tax already withheld by the federal and state governments, and then report whether we owe additional tax or should receive a refund. For U.S. citizens, green card holders, and work-visa holders, filing taxes is routine. For students studying in the U.S., filing taxes is also essential. If you are not sure whether you need to file, it is best to ask the relevant office at your school. Here are two common tax questions for international students (within 5 years in the U.S.):

  • Do students with no income need to file taxes? (No need to file Form 1040EZ, but you do need to complete and submit Form 8843.)
  • Is income from on-campus jobs / TA / RA work taxable? (You need to file Form 1040NR-EZ / 1040NR.)

For those of us who open cards and collect points, the key questions are:

  • Do all kinds of rewards—welcome bonuses, interest income, cash back, sweepstakes winnings, referral income—need to be reported on taxes?
  • If they do, how should they be reported?
  • Will the bank report this income to the IRS?
  • Under what circumstances is reporting definitely required?

To answer that, we first need to distinguish between taxable income and nontaxable income. Nontaxable income obviously does not need to be taxed. For taxable income, whether people actually report it may depend on the situation.

Which Reward Income Does Not Need to Be Taxed (Nontaxable Income)

Cash Back Is Not Taxable

For typical Nontaxable Income, the IRS has a clear definition: click here to view the IRS document. The most relevant part of nontaxable income for us is:

  • Cash rebates from a dealer or manufacturer for an item you buy

Here, Cash Rebates can be extended to include:

  • Cash back earned from credit card spending
  • Cash back earned from shopping through cashback portals
  • Merchant discounts, gift cards received with purchases, and mail-in rebates
  • Credit card welcome bonuses

The first few are easy to understand. When you shop, banks, cashback portals, and merchants may all encourage spending in various ways, and those incentives are often paid to you in the form of cash back. So this portion of income is generally not taxable. Credit card welcome bonuses are also widely viewed as a type of rebate. For example, the Chase Sapphire Preferred offers 50,000+5,000 UR points after spending $4,000. You can think of that 55,000 UR / $4,000 = 13.75 UR per dollar as a new effective rebate rate. In other words, for every $1 you spend, the credit card company gives you 13.75 UR as a rebate. Of course, the IRS has not specifically issued a special rule taxing credit card welcome bonuses, and at least for now there have not been obvious negative consequences for people who do not report them.

One important caveat: the spending discussed here refers to personal spending. If your spending is business spending, or if you are buying goods for resale, then you generally cannot say that this cash back is automatically nontaxable. This will be discussed in more detail in section 3.3 below.

The Tax Treatment of Miles and Points

If cash back does not need to be taxed, how should miles and points be treated? We know that miles (UA, AA, Delta) sitting in our accounts technically still belong to the airline. In other words, those miles are not yet our income. Only when we use those miles to redeem flights do they arguably become income in a meaningful sense. An airline may assign a cash value to those miles for tax purposes (for example, 100 miles = $2). The same also applies to hotel programs (SPG, Marriott, IHG) and bank points programs (Ultimate Rewards, Membership Rewards, ThankYou Points). After saying all that, the key point is simply this:

  • Miles and points only raise tax issues when they are redeemed

And when you think about taxes, whether they should be taxed depends entirely on how you earned those points or miles. If you earned them from credit card welcome bonuses, ordinary credit card spending, or flying on an airline, those can all be viewed as rebates, so they are nontaxable. But if you earned those points by depositing money at a bank—for example, receiving 40,000 AA miles for a Citi Gold deposit—then when you redeem them, if the bank’s estimated value exceeds $600, you may still receive a tax form.

Some People Do Not Need to Pay Tax on Interest

For most people, interest income from checking and savings accounts, as well as bank account opening bonuses, is taxable. But for nonresidents—such as students who have been in the U.S. for less than 5 years—this income is not taxable. So if tax was withheld when you opened the account or received the interest, you can file the appropriate forms to get that amount back. And if you receive a related tax form from the bank, it may still be non-taxable to you. You can report this income on:

  • 1040NR Line 9b.Tax-exempt interest

The reason bank account opening bonuses are taxable for other groups may be that these rewards are not earned through spending, but rather by depositing money. So this type of reward can also be viewed as a form of interest income.

Summary of What Is Not Taxable

  • Credit card welcome bonuses and everyday spending rewards/cash back do not need to be reported for tax purposes
  • Cash back or points earned through cashback shopping portals do not need to be reported for tax purposes
  • For nonresidents, interest income or bank account opening bonuses are not taxable

Which Reward Income Needs to Be Taxed (Taxable Income)

Put simply, Taxable Income must be reported. The IRS also has a detailed article on Taxable Income: IRS article. If you were issued a tax form, it is best to file according to the rules. If you were not issued one, then it depends on whether you voluntarily report it.

What Does It Mean to Receive a Tax Form?

When you receive certain types of taxable income, banks and some other institutions will proactively report your income to the IRS each year (commonly referred to as being issued a tax form). For example:

  • Interest from bank deposits or income from checking account opening bonuses that exceeds a certain amount (Form 1099-INT issued)
  • Income from selling items on eBay or Amazon above a certain amount, or above a certain number of transactions (1099 issued)
  • Earning income above a certain amount from placing ads (such as adworks), for example, more than $600
  • Winning prizes with relatively high value, such as more than $600 (a 1099-MISC will be issued)

Of course, not only will the IRS receive this tax form, you will also receive a copy yourself. If you are sent this type of tax form, that means the IRS also has your information. So, if you do not file your taxes as required or fail to file, and the IRS audits you later, you may face penalties or even more serious consequences. That said, if you are a Nonresident, then you generally do not need to pay tax on the first category such as interest. If you are not in this group, then you should properly file and pay your taxes.

If You Don’t Receive a Tax Form, Do You Still Need to File?

For most credit cards, the referral rewards you earn are capped, so in general you will not receive a tax form. For some cashback portals, however, as far as I know, ebates will issue a tax form (1099-MISC) if the cashback you earn from referring friends exceeds $600. So for referral income from other websites, it is best not to go over $600, so as to avoid unnecessary trouble. But if you do not receive a tax form, does that mean you do not need to report it? Actually, even if no tax form is sent to you, some income is still considered taxable and should be reported. Examples include:

  • Referral income from credit cards and other accounts
  • Winning small prizes

According to IRS rules, no matter how much this type of MISC income is, it must be reported:

Of course, if this taxable income is very small, I would guess that even if the IRS were to investigate, they would not spend much effort on very small amounts. Whether you want to report it is something you will have to weigh yourself. If this type of income is significant, I recommend consulting an attorney.

Business Spending and Taxes on Business Credit Cards

Rebates earned from personal spending generally are not taxable, but business spending is different. This is especially true for spending on business credit cards, such as Chase Ink. People familiar with the Ink cards know that Ink earns 5x UR points at office supply stores. Those 5x rewards earned from business spending are different in nature from 5x rewards on personal credit cards (for example, the quarterly 5x on Chase Freedom). The purpose of business credit card spending is for business use (such as selling products), and of course the profit ultimately generated from those expenses must be reported for taxes each year. That 5x reward should be converted into cash value and deducted from your cost basis. For example:

  • You use Ink to buy $1,000 worth of goods at an office supply store and earn 5,000 UR (=$50), then sell the goods for $1,200. When filing taxes, you should report your cost as $950, and then calculate profit based on the final sale price: profit = 1,200 - 950 = $250. That $250 is taxable.

So in business use, all merchant rebates and credit card rewards you receive are effectively part of taxable income, because they must be incorporated when calculating profit.

Common Tax Forms

Tax authorities generally require tax forms to be mailed to individuals by January 31, so people may gradually start receiving the relevant forms around this time. Common tax forms related to credit cards, investment accounts, cashback portals, and bank accounts include the following:

  • Bank interest: If you have a savings account and keep money in it, you should receive a 1099-INT tax form. If you are a nonresident, you can ignore it; otherwise, you need to include it when filing taxes. This form is generally always issued because when you opened the savings account, you already provided your SSN and completed a W-9 or similar form.
  • Bank account opening bonuses: Unlike credit card welcome bonuses, bank checking/savings account opening bonuses are taxable. Generally speaking, cash-type bonuses are reported on 1099-INT and treated as interest. UR points bonuses (sapphire banking), based on current data points, are valued at 1c/p and reported on 1099-INT. If a Citi checking TYP bonus exceeds $600, it is generally reported on 1099-MISC.
  • Investment accounts / brokerage accounts: These can generally be downloaded from your online account, and they usually become available at the end of January.
  • Referral rewards from major cashback portals / investment accounts: If in a calendar year you earn more than $600 in rewards from referring others, cashback portals such as Dosh, ebates, Ibotta will email you asking you to provide a W-9 form and collect your SSN and other information in order to issue a 1099-MISC. If you ignore them, your account may be shut down and you may be unable to withdraw the money.
  • Credit card referral rewards: Last year, Chase looked at all cards combined to determine whether your referral rewards exceeded $600, with UR valued at 1c/p. Barring surprises, they will probably calculate it the same way this year. If you referred quite a few people, be prepared to receive a 1099-MISC. In addition, AMEX historically has not issued tax forms, because each card was counted separately and did not exceed $600. Since Discover’s Cashback Match no longer applies to referral rewards, people with only one card definitely would not receive a tax form. It is still unclear whether this year two Discover cards will be combined.
  • One final reminder: even if you do not receive a tax form, if this extra income exceeds $600, you still should proactively report it. Please consult a tax professional for details...

The Tax Value of Miles and Points

Chase also issued 1099-MISC forms to people who received credit card referral rewards, with the amount calculated at 1c/p. Note that this time, as long as you generated referral rewards, you would receive a tax form, regardless of whether a single card or the total combined amount exceeded $600. Don’t rush to file just yet—wait until all of these tax forms arrive first. If you are unhappy with the valuation the bank assigned to your points, the article below explains a way to dispute it.

[2/1 update] Yesterday, most people who had received AMEX refer rewards should also have received a 1099-MISC. The amounts were calculated at 0.67c/p for Hilton points, and at 1c/p for Delta, spg, MR; cash was calculated at face value. Even if your referral income on one card did not exceed $600, you would still receive this tax form. There is no need to panic if you received one. When filing taxes, just include it under other income, list the category as 1099-MISC, and attach the form sent by the bank. This type of income should not affect your immigration status or green card application (failing to report it would be more problematic).

  • The form lists your credit card number, so you can compare it and confirm whether you really received that much in referral rewards.

A Few Specific Examples

How to Report a Bank-Issued 1099-INT

Many people who opened a Discover checking account and received the $300 account opening bonus also received a 1099-INT from Discover. If you are a nonresident (a student on F1 status who has been in the U.S. for less than 5 years), you do not need to pay tax on it. You only need to enter this income on: 1040NR Line 9b.Tax-exempt interest. If you are not a nonresident, then enter it under interest income. The same treatment applies to 1099-INT forms from other banks.

Taxes on Citi Gold Checking

Previously, opening a Citi Gold account could earn you a bonus of 40,000 AA miles or 50,000 TYP. A few years ago, Citi would issue a 1099-MISC tax form when you redeemed those rewards, and if you received one, you were supposed to report it on your taxes. In recent years, there have not been many reports of Citi issuing tax forms for this, but I still suggest keeping your redemption value under $600 per year. If you received the 50,000 TYP bonus from a checking account, it may be best to redeem directly for gift cards worth under $600. If you received AA miles, it may be better not to redeem them all within the same year.

You can also earn TYP through regular Citi Gold activities such as bill pay. One important thing to note is that these TYP are different from the TYP earned from credit card spending. This type of TYP is taxable, so if you redeem more than $600 in a year, you should report it on your taxes as well. It is still unclear what tax form Citi would issue for this, but my guess is that it would also be a 1099-MISC.

Referral income from different banks

Currently, banks cap the referral income you can earn from each card, so in most cases it will not exceed the threshold that triggers the bank to send a tax form (1099-MISC) to both you and the IRS. For example, Discover has an annual maximum of $500, and Chase is 50,000 UR/UA miles. AMEX caps referral points at 55,000 per card. In principle, if your total referral rewards exceed $600, you are supposed to report them on your taxes. That said, in my personal view, if the amount is not very large, the IRS is generally unlikely to spend significant resources investigating your return.

Summary

Tax reporting is very complicated, and there are many exceptions both mentioned in the rules and not explicitly addressed by them. So my suggestion is that if you have a lot of rewards-related income, it is best to consult a lawyer to fully understand the issue. If you have any tax-related experiences, feel free to share them in the comments.

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