IRS clarifies when credit card rewards may be taxable: The 'no spend' rule explained
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Summary
The IRS clarifies that most credit card rewards (cash back, miles, points) are not taxable as they are treated as discounts or rebates, not income. This includes welcome bonuses that require spending. However, there is an important exception called the "no spend" rule — rewards given simply for opening an account without any spending requirement may be considered taxable income. The article explains the distinction and what taxpayers should be aware of regarding credit card reward taxation.
Source
bskyIRS clarifies when credit card rewards may be taxable: The 'no spend' rule explainedhindustantimes.comKey quotes
· 3 pulledThe IRS says most credit card rewards are not taxable because they are treated as a discount or rebate, not as income, according to IRS rules.
Welcome bonuses that require cardholders to spend a certain amount before receiving the reward are also generally not taxable.
However, there is an important exception called the 'no spend' rule.
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