Thread: Tax implications of Cash Rebate

Could anyone here discuss what the tax implications of a cash rebate card are if any? Would it be like that of interest on a checking account. Are there 1099s etc. Thanks.

The rebate on a card isn't taxable. Period. Its not income. Its a "give back" of money you spent that was already taxed as income.

I have an office depot business card and have already earned rebates of 273 dollars this year but have not paid any interest or fees on the card. So for me its 273 for nothing. It it the same even when card company makes nothing on you.

Originally posted by shawbee
Could anyone here discuss what the tax implications of a cash rebate card are if any? Would it be like that of interest on a checking account. Are there 1099s etc. Thanks.

NOT TAXABLE AS INCOME

It's the same as getting items on sale. As someone pointed out, you're using after tax dollars, so you've already paid the tax.

HOWEVER, there is an exception. If you used it for purchases that you are deducting (a business expense, for example), then you either need to reduce the deduction amount by the amount of the rebate, or it is considered income.

For example, you have a business and you spend $250 for a printer. You get a rebate of $50. You either only deduct the $200 (just like if it was on sale), or if you deduct the $250, then the $50 is income.

But if it's items you're using yourself and not deducting, there is no tax implication.

I think I have it now. If it is a personal rebate card the spoils are mine, but if it is a business card being used for business deductions then I need to claim it, yet I also get to deduct interest because it can be deducted as a business expense. Sorry about going back and forth but since I do our business books it is important that I thoroughly understand the situation. Thanks for everyones help.