Are Bank Account Bonuses Taxable? 1099-INT, 1099-MISC and Card Bonuses

Yes. A bonus for opening a bank account is taxable income in the year it's paid, usually reported as interest. Banks send a Form 1099-INT for interest of $10 or more, and some report bonuses on a Form 1099-MISC instead. Either way, you owe tax on it whether or not a form arrives. Credit card sign-up bonuses earned by spending are different: they're generally treated as a rebate on your purchases, not income.

That changes what a bonus is really worth. A $300 checking bonus is closer to $234 if your federal rate is 22%, before any state tax. The free Bank Bonus Calculator works out the after-tax value, including monthly fees and the interest your money could have earned elsewhere.

This guide is general information, not tax advice. Your situation may differ, so check with a tax professional if you're unsure.

How bank bonuses are reported

Most banks use Form 1099-INT. The IRS instructions for Form 1099-INT say Box 1 includes amounts of $10 or more "whether or not designated as interest" paid by banks, credit unions and similar institutions. That's why a checking or savings bonus usually shows up next to your ordinary interest. Several offers in the SuperChurn catalog say so in their terms, for example Chase Total Checking, Chase Savings, Citi Regular Checking and KeyBank Smart Checking.

Some use Form 1099-MISC. A few banks and brokerages report the bonus as "other income" instead. In the catalog, SoFi Checking and Savings and J.P. Morgan Self-Directed Investing list a 1099-MISC. The tax you owe is the same kind of ordinary income. Only the form and the line on your return differ.

No form doesn't mean no tax. Starting with payments made in 2026, the threshold for filing a 1099-MISC rose from $600 to $2,000, so you may not get a form for a smaller bonus. The income is still reportable. For interest, the IRS is direct about it: "You must report all taxable and tax-exempt interest on your federal income tax return, even if you don't receive a Form 1099-INT."

It's taxed in the year it's paid. A bonus that posts in January counts for that year, even if you opened the account the previous fall. Keep a note of what posted and when. It's easy to lose track of five small bonuses by tax time.

Brokerage bonuses

Bonuses for bringing money to a brokerage, like E*TRADE or J.P. Morgan Self-Directed Investing, are also generally taxable. Brokerages differ on the form (1099-MISC, 1099-INT, or a note that the credit "may be subject to tax reporting"), so read the offer terms and look for the form in your year-end tax documents.

Credit card sign-up bonuses

Card bonuses are usually not taxed, as long as you had to spend to earn them. The common treatment is that points or cash back earned through purchases are a rebate on what you spent, which lowers your cost rather than adding income.

The exception is a bonus that doesn't require spending. In Shankar v. Commissioner (2014), the Tax Court agreed that Citi correctly reported income for ThankYou points that had been awarded for opening a bank account, with no spending involved. If a card or bank gives you something just for opening an account, expect it to be reportable, and you may receive a 1099-MISC.

Referral bonuses you earn for referring someone else are also generally treated as income.

What a bonus is worth after tax

A quick way to compare offers:

1. Start with the bonus: say $400.
2. Subtract federal tax at your marginal rate: at 22%, that's $88.
3. Subtract state tax if your state taxes interest: at 5%, another $20.
4. Subtract any monthly fees you'll pay while you complete the requirements and wait to close.
5. Subtract the interest your deposit could have earned in a high-yield savings account over the same time.

What's left is the bonus's real value. A savings bonus that needs a large balance can look generous until you count the interest the money would have earned elsewhere. The Bank Bonus Calculator does all five steps and shows the effective APY on the money you tied up.

A simple tax-time checklist

• List every bonus that posted during the year, with the amount and the bank.
• Match each one to a 1099-INT or 1099-MISC when they arrive in January and February.
• For any bonus without a form, still report it (as interest if the bank called it interest).
• Keep the offer terms or a screenshot that says how the bonus was reported, in case the numbers don't match.

SuperChurn keeps a record of each bonus's posted date and amount, and each offer's page lists the tax form the terms mention.

FAQ

Do I pay tax on a bank bonus if I close the account before tax time? Yes. What matters is that the bonus was paid to you, not whether the account is still open.

Is a $50 bonus reported? Banks report interest of $10 or more on Form 1099-INT, so usually yes. Even if it isn't, it's still taxable income.

Are credit card welcome bonuses taxable? Generally no, when you earned them by spending. A bonus given without any spending may be reportable income.

Do bank bonuses affect my tax bracket much? They're taxed at your ordinary rate like other interest. They only push you into a higher bracket if your income is already right at the edge of one.

Sources

• IRS, Instructions for Forms 1099-INT and 1099-OID (Box 1: amounts of $10 or more "whether or not designated as interest"): https://www.irs.gov/instructions/i1099int
• IRS, Instructions for Forms 1099-MISC and 1099-NEC (the $2,000 threshold for payments made in 2026): https://www.irs.gov/instructions/i1099mec
• IRS, Topic no. 403, Interest received: https://www.irs.gov/taxtopics/tc403
• Tax Withholding and Reporting blog, on the IRS treatment of credit card rewards: https://www.twrblog.com/2021/05/making-a-point-tax-courts-anikeev-decision-challenges-longstanding-irs-policy-on-credit-card-rewards/

SuperChurn isn't owned by or endorsed by any bank or card issuer. This guide is general information, not tax, financial or legal advice.