I have received $750 cash back from Citibank Credit Card (Mastercard) from all my purchases this year (2% back rewards). Do I need to report this on my 2016 tax returns? Is there a threshold for credit card rewards cash back like $600 and over and I will receive a 1099?
Also I received a cash back reward certificate from Costco for about $111 for my purchases this last year. Is this taxable? do I need to add this to the Citibank cash back when filling my tax returns?
The IRS has pretty much come to the conclusion that "rebates" such as you describe are, essentially, reduction in the cost of the items purchased. Accordingly, the only effect of these rebates would be a reduction of purchases that were expensed as deductions. All the other stuff - your big screen TV, groceries, subscriptions to Time magazine - are irrelevant. You won't be getting a 1099-MISC from the credit card companies. (Yet.)
Tom Young
A lump sum cash back paid as an incentive to open an account is taxable. Some banks issue a 1099-MISC, some don't. Cash back earned through the course of normal daily use is not taxable income, it's treated as a discount of the usual merchant fee charged by the bank and incorporated in the merchant's mark up.
So it doesn't matter if I receive $100 or $3000 back from my purchases on my credit card, I won't receive a 1099 and I don't need to report it on my taxes, correct?
You shouldn't receive a Form 1099. It would only "matter" if the credit card was used for deductible business or other purposes.
" Some banks issue a 1099-MISC, some don't." So is there a chance I will get a 1099? The credit card was used for personal purchases.
I've never gotten one and I don't know any banks that do, but the only way to tell for sure is to ask your bank.