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How to report SUB on tax returns?

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Regular Contributor

How to report SUB on tax returns?

I got the 60,000 thank you points sub on my citi premier recently. I'm curious how do you declare this in tax returns? Also do you declare the value you get from the points like 1.25 cents per point based on how it was used or just a plain 1 cent per point?
BofA Cash: 6k
Citi Premier: 5k
Citi DC: 4k
Chase Amazon: 4k
Cap1 QS1: 1.5k
Barclays Uber: 0.5k







Next App in: Late Oct 2019

Torch bearer of the Bucketeers' Society. Shamefully carrying a bucketed Cap One QS1 with AF & zero chance of a PC.
Message 1 of 11
10 REPLIES 10
Regular Contributor

Re: How to report SUB on tax returns?

Afaik you don't. Subs and points are considered rebates against your purchases not income because you have to actually buy something to get them. 

Feel free to correct me if i'm wrong.

Message 2 of 11
Community Leader
Mega Contributor

Re: How to report SUB on tax returns?

You're not wrong, you dont report SUBs

EX 759 EQ 774 TU 753


Message 3 of 11
Highlighted
Established Contributor

Re: How to report SUB on tax returns?

CC SUB that have a spend requirement are not generally considered income.

 

If you received an SUB for a bank account or an incentive like a CC referral bonus or incentive for switching to e-statements, that could be considered income. 

 

If it's considered income by Citi and it exceeds a certain amount ($600 is the threshold IIRC), you'll get a 1099-MISC or 1099-INT or some other flavor of a 1099 early next year that will tell you so and it will tell you the exact value that Citi considers those points to be worth. Otherwise, there shouldn't be a need for you to declare it. (Note: I'm not a tax lawyer, don't take this as tax or legal advice.)

 

I believe, in the past when AmEx or Chase or Citi has considered it income, they usually valued their points at 1¢ apiece. See DoC links below:

 

https://www.doctorofcredit.com/chase-to-send-out-corrected-1099-forms/

https://www.doctorofcredit.com/american-express-sends-out-1099s-for-referral-bonuses-hilton-1-25-cpp...

 

Here's a little blurb on a DoC article about how Citi has handled some TY tax reporting in the past. It may be that you will only receive a 1099 in the year of redemption and only when you exceed a total redemption of $600 worth of points:

 

https://www.doctorofcredit.com/citi-gold-checking-up-to-40000-thankyou-points-promotion-no-direct-de...

Message 4 of 11
Mega Contributor

Re: How to report SUB on tax returns?


@SBR249 wrote:

CC SUB that have a spend requirement are not generally considered income.

 

If you received an SUB for a bank account or an incentive like a CC referral bonus or incentive for switching to e-statements, that could be considered income. 

 

If it's considered income by Citi and it exceeds a certain amount ($600 is the threshold IIRC), you'll get a 1099-MISC or 1099-INT or some other flavor of a 1099 early next year that will tell you so and it will tell you the exact value that Citi considers those points to be worth. Otherwise, there shouldn't be a need for you to declare it. (Note: I'm not a tax lawyer, don't take this as tax or legal advice.)

 

I believe, in the past when AmEx or Chase or Citi has considered it income, they usually valued their points at 1¢ apiece. See DoC links below:

 

https://www.doctorofcredit.com/chase-to-send-out-corrected-1099-forms/

https://www.doctorofcredit.com/american-express-sends-out-1099s-for-referral-bonuses-hilton-1-25-cpp...

 

Here's a little blurb on a DoC article about how Citi has handled some TY tax reporting in the past. It may be that you will only receive a 1099 in the year of redemption and only when you exceed a total redemption of $600 worth of points:

 

https://www.doctorofcredit.com/citi-gold-checking-up-to-40000-thankyou-points-promotion-no-direct-de...


As others have said, credit card SUBs (and rewards from credit card use) are not considered taxable, basically rebates.    SUBs for bank accounts (this was common with SUBs from Citi for Citigold etc) are taxable, as are apparently referral bonuses.     You generally get a form is the total exceeds $600, but tax law will say you still need to declare these things even if you don't receive a form  (just as a few cents in interest income SHOULD be reported even if it is below threshold for a 1099-INT)    Now what your moral compass tells you to do, well, that's different!

 

https://www.investopedia.com/ask/answers/110614/are-credit-card-rewards-considered-taxable-income-ir...

 

says that SUBs without a purchase needed are taxable, but don't know any of those....

Message 5 of 11
Moderator

Re: How to report SUB on tax returns?

The reporting threshold for 1099-INT is $10 not $600
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Message 6 of 11
Established Contributor

Re: How to report SUB on tax returns?

I don't think all bonus are reported on 1099-INT. I think a lot of incentives are actually on 1099-MISC and that may be a $600 threshold. 

Message 7 of 11
Regular Contributor

Re: How to report SUB on tax returns?

I'm not entirely clear on this guys. So since if I get a $700 airline ticket on my nearly 60,000 ty points, since it's over $600 do I declare it as income?

These points were provided after a spend target of $4000.
BofA Cash: 6k
Citi Premier: 5k
Citi DC: 4k
Chase Amazon: 4k
Cap1 QS1: 1.5k
Barclays Uber: 0.5k







Next App in: Late Oct 2019

Torch bearer of the Bucketeers' Society. Shamefully carrying a bucketed Cap One QS1 with AF & zero chance of a PC.
Message 8 of 11
Mega Contributor

Re: How to report SUB on tax returns?


@SBR249 wrote:

I don't think all bonus are reported on 1099-INT. I think a lot of incentives are actually on 1099-MISC and that may be a $600 threshold. 


Right, I used the INT as an example where you are meant to report even below threshold to get the form.   The incentives are on 1099-MISC with $600 threshold

Message 9 of 11
Mega Contributor

Re: How to report SUB on tax returns?


@NaaryalHead wrote:
I'm not entirely clear on this guys. So since if I get a $700 airline ticket on my nearly 60,000 ty points, since it's over $600 do I declare it as income?

These points were provided after a spend target of $4000.

You don't need to declare it.   This was a credit card SUB that had a required spend transaction, so the IRS doesn't treat it as any sort of taxable income.     If the same points came from opening a Citigold bank account it would be taxable.

Message 10 of 11
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