With tax season just around the corner, credit card enthusiasts may be wondering whether they need to pay taxes on the rewards they earned in 2025.
Good news? Generally, credit card rewards are not considered taxable income. However, certain types of incentives, such as checking account bonuses and credit card referral bonuses, may prompt your bank to send you a 1099.
Let’s break down when you should receive your 1099 reward and what steps you should take if you think you received the wrong reward.
Are credit card rewards taxable?
In most cases, credit card rewards are not taxable.
That’s because in most credit card rewards programs, you have to spend money to earn the rewards. To receive the welcome bonus, you must meet spending requirements. Earn points and miles when you make purchases using your card.
So, generally speaking, the rewards you earn from everyday card purchases and credit card benefits (such as statement points) are not considered taxable income. Instead, they are often viewed as rebates on regular expenses.
However, there is one exception. Bonuses received without being spent (for example: referral bonuses and automatic bonuses for opening new bank accounts) are considered taxable income. That’s because you don’t have to spend money on the card to earn rewards.
If you earned a lot of points or miles through multiple referral bonuses, or opened a bank account with a welcome bonus just for signing up, you may receive a 1099 this year.
Related: Can you pay your taxes with a credit card?
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Which credit card rewards are taxable?
As mentioned before, most rewards you earn through your credit card are tax-free. The one exception here is that you receive a referral bonus when someone applies for a credit card through your referral link.
Bonuses are considered income because you don’t have to spend any money to earn them. However, it’s worth noting that the people you mentioned don’t have to pay taxes on the winnings they receive for completing the spending requirements.
Is cash back taxable?
In most cases, no. A 2010 Internal Revenue Service (IRS) memorandum states that cash back earned on credit card purchases is not taxable income.
However, if you receive the money when you open a bank account without meeting the minimum spending requirements, it will be considered taxable income and you must report it on your tax return.
Related: Best Cash Back Credit Cards
Are business credit card rewards taxable?
Just like personal cards, welcome bonuses and rewards you earn on purchases made with a business credit card are not considered taxable income.
However, when claiming business expenses, you can only claim the net cost of the item after you receive any statement points as a credit card benefit, not the full cost before the points are applied.
Related: Best Business Credit Cards
Is the bank account welcome bonus taxable?
Yes. Bonuses for opening a new bank account fall into the same category as credit card referral bonuses because you don’t have to spend any money to earn them. According to the IRS, this means they need to pay taxes.
TPG senior editor Lyndsey Matthews received two 1099 forms for checking account bonuses after signing with SoFi and American Express in 2025. These bonuses are included in the interest these accounts earned last year—both are considered taxable income.
Just like credit card referral bonuses, there’s no guarantee you’ll get these bonus 1099s, but you should report them as income regardless.
Will I receive a 1099 credit card reward?
Sometimes, if you received a taxable award, you will receive a 1099-MISC or 1099-INT.
A 1099, often called an IRS information return, shows income you received from third parties.
Not all issuers send these forms. It is recommended that you keep your own records because even if you do not receive a 1099, you still need to report all of your income.
Related: If I cash out points and miles, do I have to report it on my taxes?
Which card issuers send 1099 credit card rewards forms?
If you earn $600 or more through referral bonuses, you should receive a 1099 form from most major issuers. If you were expecting to receive a 1099 form but did not receive one, you can file for one or estimate your income.
It is important to note that you must Even if the bank doesn’t send you a 1099, report this income to the IRS.
In other cases, if you receive a 1099 that you believe was issued in error, you can contact the issuer for clarification or correction.
Historically, banks viewed statement credits and bonus points as expense rebates and the IRS did not view them as taxable income. So far, we have not seen a bank issue a 1099 statement letter of credit, but we will be watching closely.
Where can I report my credit card rewards income via 1099?
You should include the income on line 8z of the 1040 under the heading “Other Income” as reported on Schedule 1 under “Other Income.”
If you need to calculate a referral bonus value, use the issuer’s valuation of its points or miles or a third-party valuation.
For example, Capital One values its miles at 1 cent per point, while TPG values them at 1.85 cents per point in February 2026. When calculating the value of Capital One recommendations, it’s usually in your best interest to use a valuation of 1 cent per point.
bottom line
Even if you get thousands of dollars in value from your credit card welcome bonus and everyday spending, you typically don’t have to pay taxes on those rewards.
However, this is not the case if you received bonus rewards by opening a bank account or collecting multiple referral bonuses. You must pay taxes on these awards.
Be sure to document your sources of income. While many banks will issue 1099 forms for this income, some may not. However, you still have to pay taxes on these earnings because they are considered income.
If you are concerned about owing taxes on your credit card rewards or have other questions, we recommend that you consult a tax professional.
RELATED: Earn points, miles and cash back when you file your taxes
