Mary Christenson had been saving up her credit card points for years. The retired teacher is in the process of remodeling her home, so the extra $2,200 would come in handy for some new appliances.
But in January, Mary received a notification from her bank informing her that a 1099 was being filed for her credit card rewards – reporting it all as taxable income, she says.READ MORE: Stagg High Stabbing Suspect Anthony Gray Ordered To Undergo Mental Evaluation
“Well, it’s like they’re not even going to listen to my explanation,” she said. “They’re just saying, no, it’s over $600 so we have to report it.”
Mary raises a point. After she reached out to CBS13, Kurtis investigated the issue in case you were wondering whether your own credit card rewards were taxable.READ MORE: Boosted Californians Getting COVID At Twice The Rate Of Those Vaccinated But Not Boosted
The IRS considers any credit card rewards received as a result of spending money as non-taxable income. This includes points, miles and cashback earned. So long as you’re spending money to receive the rewards, the Internal Revenue Service won’t touch it.
But, if you earned any points or miles just for signing up on a card, or referring a friend, those are considered taxable gifts.MORE NEWS: Applications Now Open For $10K Grants For Sacramento Artists
In Mary’s case, she says all of her rewards were earned through purchasing. Her bank said they were looking into the matter, but did not respond to additional requests for comment.