Tax liability for receiving airline gift card

[chrisacode]

Hello. While flying on a business trip as a freelance contractor, I agreed to allow Delta Airlines to bump me from a flight and take a later one to my destination. They gave me a $900 Delta gift card for my inconvenience. I had purchased the original ticket and was later reimbursed for the full fare by my employer under our contract agreement. I used the gift card to purchase additional Delta flights for similar business use. Please inform me if I have any tax liability for that gift card, if it is considered income, etc. Do I need to report it in some manner on my taxes, and if so, how? Thank you.

[Scooter1768 · Accepted solution]

Hi! chrisacode, 

Great question and good news! The IRS has pronounced that airline gift cards, similarly to airline frequent flyer miles, are considered nontaxable rebates and you will not have any additional tax liability from receiving them. Additionally, it doesn't matter if you paid or your employer paid for the travel. 

Enjoy your travels!