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Is the cash back earned by using the credit card TAXABLE and needs to be reported in the IT return?

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Filed under: Credit Tax return Tax law
Attorney answers 3


As I recall, cash back on a credit card is not taxable income, it is treated as a purchase price adjustment - the only tax effect is that the cost of an item you buy is reduced, which may affect depreciation expenses if it is a depreciable asset.

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Generally the answer is no.

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It is probably considered a rebate, and a rebate is not considered income.