How are Amazon gift cards from bank account opening bonuses taxed in the USA?

So I've been looking into some new checking account options, and I noticed a bunch of them are offering these Amazon gift cards as rewards for opening a new account. Like, I saw one that gives you a $300 Amazon gift card if you open an account and set up direct deposit within 60 days. I've never done this kind of thing before, and I'm wondering how this works for tax purposes. Do I have to report the gift card as income? Will the bank send me some kind of tax form? Does the IRS consider this taxable income even though it's not cash? I'm trying to figure this out before I sign up because I don't want to get hit with an unexpected tax bill next year. Any insights on how these promotional gift cards are treated for tax purposes would be super helpful! Thanks!

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20 comments

Miguel Harvey

•8M

Yes, those bank account bonuses (including Amazon gift cards) are considered taxable income by the IRS. The bank will typically report it on a 1099-INT form if the value is $600 or more, but technically you're supposed to report it regardless of the amount. Even if you don't receive a tax form, the IRS still considers it income. The important thing to know is that the bank treats this as interest income, even though it's a gift card and not actual interest. So when you file your taxes, you'd include it with your other interest income. The bank essentially sees this as them "paying you" to open an account with them. Many people are surprised by this since gift cards don't feel like income, but from a tax perspective, it's compensation and therefore taxable.

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Miguel Harvey

•8M

Yes, technically you're still legally required to report it even if it's under the $600 threshold for the bank to send a 1099-INT. The tax code requires taxpayers to report all income regardless of whether you receive a tax form. For the amount to report, you would use the fair market value of the gift card - so if it's a $200 Amazon gift card, you'd report $200 of interest income on your tax return. You'd include this on Schedule B along with any other interest income you received during the year.

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Oliver Cheng

•8M

I went through this exact situation last year and found a service called https://taxr.ai really helpful. I opened accounts at two different banks - one gave me a $250 Amazon card and another gave me a $500 Visa gift card. I wasn't sure how to handle the reporting since only one bank sent me a form. I used taxr.ai to analyze my situation and they explained exactly how to report both bonuses properly. They even confirmed that these bonuses are considered interest income rather than "prizes and awards" which saved me from potentially misreporting them in the wrong section of my tax return.

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Oliver Cheng

•8M

Yes, taxr.ai can review your specific tax documents and forms. You upload your documents directly to their platform, and their system analyzes everything to provide personalized guidance. They'll identify items that might be missing or incorrectly categorized - which was perfect for my situation with the gift cards. For non-monetary bonuses like an iPad, those are absolutely taxable too. The IRS considers the fair market value of any bonus (cash or item) as taxable income. Taxr.ai would help determine the correct value to report and which tax form sections need to include it, even if your bank didn't send documentation.

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Ella Cofer

•8M

Just wanted to follow up on my experience with taxr.ai after asking about my iPad bonus situation. I decided to give it a try and am really glad I did! I uploaded my bank statements showing the account opening and bonus, and they confirmed I needed to report the iPad as interest income at its fair market value ($399). They even showed me exactly where to put it on my tax forms and explained that since it was below $600, the bank wasn't required to send a 1099-INT, but I still needed to report it. Saved me from potentially underreporting my income and risking issues with the IRS later. Super straightforward process!

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Kevin Bell

•8M

If you're having trouble getting clear answers about your bank bonus taxation situation from the IRS directly, I recommend https://claimyr.com. I spent weeks trying to call the IRS about a similar issue with promotional rewards from multiple banks that totaled over $1,200, and kept getting disconnected or waiting for hours. I found this service that basically waits in the IRS phone queue for you, then calls you when an actual IRS agent is on the line. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. I was skeptical at first but was connected to an IRS agent within a day who gave me the official guidance on reporting these kinds of account bonuses.

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Kevin Bell

•8M

The service uses an automated system that stays on hold with the IRS so you don't have to. When an actual IRS agent picks up, you get a call, and you're connected directly to that agent. It's basically like having someone wait in a physical line for you, but for phone calls. I understand the skepticism, I felt the same way at first. But after trying to reach the IRS for three weeks with no success (kept getting disconnected after 2+ hour waits), I decided to try it. The difference is they have systems dedicated to staying on hold 24/7, while most of us can't sit on hold for 3-4 hours during a workday. And yes, you're definitely connected to real IRS agents - I confirmed my specific bank bonus tax questions with them.

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Felix Grigori

•8M

I need to eat my words about Claimyr. After posting my skeptical comment, I decided to try it anyway because I was getting absolutely nowhere trying to reach the IRS about my bank bonus situation. I'd received over $800 in Amazon gift cards last year from various bank account offers and needed clarification on reporting. I was shocked when I got a call back in about 3 hours with an actual IRS representative on the line! The agent confirmed that all bank bonuses, including gift cards, are indeed taxable as interest income. They also explained that I should report all bonuses even if I didn't receive a 1099-INT. Really glad I gave this a try after being so skeptical.

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Felicity Bud

•8M

One thing nobody has mentioned yet - the timing of when you receive the bonus vs when it's reported can be confusing. I opened a Chase account in December 2024 but didn't receive my $225 Amazon gift card until January 2025. Chase included it on my 2025 1099-INT even though I completed all the requirements in 2024. This is because banks report the income in the year you actually receive the bonus, not when you qualify for it. Just something to keep in mind if you're opening accounts near the end of the tax year!

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Felicity Bud

•8M

Credit card cash back rewards are actually treated differently from bank account opening bonuses. In most cases, the IRS views credit card rewards as rebates or discounts on purchases you've made rather than as income. So generally, credit card cash back isn't taxable. However, if you received a sign-up bonus for opening a credit card that wasn't tied to any spending requirement (just for opening the account), that might be treated as taxable income. It's the difference between a discount on something you bought versus getting paid just to open an account.

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Miguel Harvey

•8M

The bank bonus will be taxed as interest income at your ordinary income tax rate. It gets added to your total income for the year, so technically it could push you into a higher bracket if you're right at the threshold. But remember that tax brackets in the US are marginal - only the portion of income that falls into a higher bracket gets taxed at the higher rate, not all of your income. So even if the $500 pushes you into the next bracket, only that amount (or portion of it) would be taxed at the higher rate, not your entire income.

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Chloe Davis

•5M

Something to keep in mind is that you might also want to factor in the tax cost when evaluating these bank bonuses. For example, if you're in the 22% tax bracket and get a $300 Amazon gift card, you'll owe about $66 in taxes on it. So the "real" value of the bonus to you is closer to $234. I've started keeping a spreadsheet tracking all my bank bonuses throughout the year so I can set aside money for the tax bill. It's easy to forget about these when tax time comes around, especially if you opened multiple accounts. Just received a $400 bonus from Wells Fargo last month and immediately moved $88 to my tax savings account (assuming 22% bracket). Also worth noting - some banks are better about sending the 1099-INT forms than others. Credit unions in particular seem to be inconsistent with reporting, but you're still legally required to report the income regardless.

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