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Is this new for non-cash rewards?


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From BOA's Amtrak credit card application -

 

"The value of this reward may constitute taxable income to you. You may be issued an Internal Revenue Service Form 1099 (or other appropriate form) that reflects the value of such reward."

 

20,000 bonus points for $1,000 spend

Edited by SunnySideUp32
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Came across this discussion in another website

https://www.bogleheads.org/forum/viewtopic.php?f=2&t=201887

 

What I took away from that discussion was that, if the rewards are redeemed into a bank account that is also owned by the credit card issuer, it might fall in that gray area where the rewards are hard to distinguish from regular interest payments etc that we know are taxable. So the legalese might just be Bank of America trying to protect itself

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CC rewards are not taxable. They are considered a rebate.

 

Bank account bonuses, even in the form of miles or points, are taxable.

 

Nothing new and nothing has changed. You don't have to pay tax on them.

Came across this discussion in another website

https://www.bogleheads.org/forum/viewtopic.php?f=2&t=201887

 

What I took away from that discussion was that, if the rewards are redeemed into a bank account that is also owned by the credit card issuer, it might fall in that gray area where the rewards are hard to distinguish from regular interest payments etc that we know are taxable. So the legalese might just be Bank of America trying to protect itself

It doesn't matter how they are redeemed. CC rewards are not taxable.

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