Are bank bonuses taxable?

The short answer

Yes. In the U.S., a cash bonus for opening a bank account is generally treated as taxable income. Banks usually report it to the IRS on a 1099-INT (as interest), sometimes a 1099-MISC, typically once the total reaches $10.

What that means in practice

• You're expected to report the bonus even if you never receive a form — a missing 1099 doesn't make it tax-free.
• It's added to your taxable income for the year you received it and taxed at your ordinary rate.
• Forms usually arrive in January for the prior year. Keep your own record of bonuses earned so nothing is a surprise.

Bank bonuses vs. credit-card bonuses

A common point of confusion:

• Bank account bonuses (open + deposit) are generally taxable.
• Credit-card welcome bonuses earned by spending are generally not taxable — the IRS usually treats them as a rebate on your own spending.
• A reward given with no spending requirement (rare) can be taxable.
• Brokerage transfer or deposit bonuses are often reported on a 1099 too.

A simple rule of thumb

Remember the cash isn't entirely yours: a $300 bonus is worth roughly $220 after tax at a 25% rate. Chase several in a year and the total adds up at filing time.

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