Are frequent flyer miles ever taxable?

Are frequent flyer miles ever taxable? Generally not if they’re awarded for flying with an airline or using a credit or debit card, because they’re considered a nontaxable rebate. But sometimes the IRS views miles as taxable. It might do so when miles are awarded as a sweepstakes prize or as a promotion. For instance, in Shankar v. Commissioner, the U.S. Tax Court sided with the IRS, finding that airline miles awarded in conjunction with opening a bank account were taxable. If you’re concerned you’ve received mile awards that could be taxable, please contact us.