Credit Card Rebates
legal information on cash back rebates, credit card miles, and miles programs
Are Credit Card “Cash Back” Rebates Taxable?
Cash back rebates are among the most popular of features of U.S. credit cards. According to a March 2009 study by TNS, the percentage of U.S. cardholders with cash back cards rose from 57 percent to 61 percent between 2007 to 2008, and TNS forecasts the percentage to gradually increase at least until 2010. Some cardholders naturally wonder whether the income from these rebates needs to be disclosed on their tax return. There is no definitive ruling from the IRS on the subject, but several things suggest the IRS would not consider cash back taxable income. Read more
Can I Deduct Credit Card Rebates Paid to Charity?
Some credit card issuers allow cardholders to donate all or some of their cash rewards to a charitable cause. Discover Card, for example, allows cardholders to donate their Cashback Bonus to one of several charities, and even adds 20% to the amount. These programs raise the question of whether the donation can be considered tax-deductible by the cardholder. While there is no definitive ruling from the IRS on the subject, a 2002 private letter ruling suggests that the IRS would allow a deduction for these donations. Read more