Bad News: The IRS Wants to Ruin Your “Up in the Air” Fantasies

Yes, it would seem that now some of your airline miles might be treated as taxable income. This doesn’t affect me, personally, because I can’t afford to travel, and I can’t open up any new lines of credit, but it might be a hardship for someone who insists on getting free miles wherever they can:

The AP notes that – generally — frequent-flier miles given as credit card rewards have not been considered taxable “because they’re treated as rebates on spending, according to the Tax Institute at H&R Block.”

However, the catch in this situation is that miles doled out as a “reward” for opening a new checking or savings account may be viewed differently. The AP says that’s because “you don’t spend any money to receive it,” meaning it’s not really a rebate on spending.

“So the gift is instead treated similarly to interest income, meaning that it’s taxable,” AP writes.

“When a customer receives a gift for opening a bank account — whether cash, a toaster or airline miles — the value of that gift is generally treated as income and subject to reporting,” Citibank says in a statement to AP.

Thus, it would seem your miles earned as a reward for spending are safe–the IRS can’t touch those miles you earned from that discounted Real Doll eBay shopping spree you went on last week. But that toaster you got from Bank of America better show up on your tax returns, buster.

Also, fuck you and your airline miles, you hi-falutin’ fatcat.

Create a free website or blog at