Yes, once you redeem the points for gift cards or other legal tender (which includes PayPal), the value to you becomes taxable income. The payor/website may not send you Form 1099 until you have redeemed at least $600 worth of points. But the IRS considers all income to be taxable and therefore needs to be reported on your tax return.
If you let the points accumulate without redeeming them, there is no income to report.
If this activity is a hobby for you, report the income in TurboTax under Federal Wages & Income >> Less Common Income >> Miscellaneous Income >> Hobby Income.
If you consider this activity to be an intent to make money (a "job"), then the income and any related expenses should be reported as Self-Employment Income on Schedule C. Any profit would be subject to SE Tax.
The easiest way to find either topic in TurboTax Online is to open your return and click the magnifying glass at the top right side of the TurboTax header. Enter "hobby income" (or "schedule c"), hit Enter, then click the "jump to" link. This will take you directly to the start of the section.
Or go to the left rail and choose Tools >> Tools >> Topic Search. Type in the type of income you need, then click the topic in the list.
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