Yes, bank sign-up bonuses are taxable income, and you'll report them on your tax return

A sign-up bonus — the cash or account credit a bank gives you for opening an account and meeting deposit or transaction requirements — counts as taxable income to the IRS. The bank will send you a tax form documenting the bonus, and you must include it when you file. The form is usually a 1099-INT (if the bonus is under $10) or a 1099-MISC (if it's $10 or more), though some banks use different reporting methods. You report the amount on your federal tax return, and it may affect your tax bracket or refund.

The key point: you owe tax on the bonus in the year you received it, not the year the bank sends you the form. If you got the bonus in December 2024, you report it on your 2024 return even if the 1099 arrives in January 2025.

Key Takeaways

  • Bank sign-up bonuses of $10 or more are reported on Form 1099-MISC, and bonuses under $10 may appear on Form 1099-INT or not be reported at all — but you must report them regardless.
  • The bank will mail the form to you by January 31 of the year after you receive the bonus, and you must include the amount in your taxable income on Schedule 1.
  • If you receive a 1099 form but did not get the bonus or the amount is wrong, contact the bank immediately to request a corrected form before you file.
  • Sign-up bonuses are treated as miscellaneous income, not interest, so they increase your taxable income and may push you into a higher tax bracket.

How banks report sign-up bonuses on tax forms

The IRS requires banks to report bonuses above a certain threshold. For bonuses of $10 or more, the bank files a Form 1099-MISC with the IRS and sends you a copy by January 31. The bonus appears in Box 3 (Other Income) on the form. Bonuses under $10 may be reported on a Form 1099-INT in the interest section, or the bank may not issue a form at all — but that does not mean the bonus is not taxable.

Some banks report bonuses differently depending on how they structure the offer. A bonus paid as a direct deposit into your account is usually reported on 1099-MISC. A bonus credited as account interest (which is rare) might appear on 1099-INT. If you open multiple accounts at the same bank in one year, each bonus may be listed separately on the same form, or the bank may combine them into one line item. You will receive your copy in the mail or through your online banking portal.

Check the amount against your records immediately. If the form shows a bonus you did not receive, or the dollar amount is wrong, call the bank's tax department or customer service and ask them to issue a corrected form (called an amended 1099) before you file your return. Do not file until this is resolved, because a mismatch between your return and the bank's report to the IRS can trigger an audit notice.

Where to report the bonus on your tax return

You report the bonus amount on your federal tax return for the year you received it, regardless of when the bank sends the form. The bonus is added to your other income and taxed at your ordinary income tax rate — it does not receive any special treatment. On your return, the bonus goes on Form 1040, Schedule 1 (Additional Income and Adjustments), in the line for "Other Income."

If you use tax software, it will prompt you to enter the amount when you input your 1099 forms. If you file by hand, you write the amount on the appropriate line and attach a copy of the 1099-MISC to your return. State income tax treatment varies: most states tax sign-up bonuses the same way the federal government does, but a few states do not tax certain types of bank bonuses or have different thresholds. Check your state's tax agency website or ask a tax preparer if you live in a state with special rules.

What to do if you don't receive a 1099 form

If you received a sign-up bonus but did not get a tax form by early February, contact the bank and ask whether they issued one. Some banks only send forms to customers who meet certain conditions — for example, they may not report bonuses under $10, or they may only report if the account remained open for a full year. Ask the bank directly what their reporting threshold is and whether your bonus meets it.

If the bank confirms they did not issue a form, you still must report the bonus on your return. Write "No 1099 received" next to the amount on Schedule 1, or include a note with your return explaining that you received the bonus but the bank did not report it. The IRS does not have a record of the bonus from the bank, but you are still legally required to report it. If you filed your return without reporting a bonus because you did not receive a form, and the IRS later contacts you, you can file an amended return (Form 1040-X) to add the income.

Bonuses that may not generate a 1099

Some sign-up bonuses fall below the reporting threshold and may not generate a tax form. Bonuses under $10 are often not reported by banks, though you are still required to report them on your return if you received them. A few banks offer bonuses in the form of account credits rather than cash deposits — for example, a $50 credit toward fees — and these may be treated differently for tax purposes. Ask the bank whether a credit bonus counts as taxable income or is simply a fee waiver.

Bonuses tied to specific conditions — such as a bonus you receive only if you maintain a minimum balance for a full year — are taxable in the year you actually receive the money, not the year you opened the account. If the bank credits the bonus to your account in January 2025 but you had to keep the account open through December 2024, you report it on your 2025 return. The timing of when you receive the money, not when you earned it, determines the tax year.

Correcting errors on your 1099 form

If the 1099-MISC or 1099-INT shows an incorrect amount, or lists a bonus you did not receive, act quickly. Call the bank's customer service or tax department and explain the error. Ask them to issue a corrected 1099 (marked "CORRECTED" at the top) and send it to you and the IRS. The bank must do this before you file your return if possible, though they can issue corrections after filing as well.

If you already filed your return with the wrong amount, you will need to file an amended return (Form 1040-X) once you receive the corrected form. The amended return corrects your taxable income and may result in a refund or a small additional tax bill, depending on whether the original form overstated or understated the bonus. Keep records of all communication with the bank about the error — emails, call notes, dates — in case the IRS questions the discrepancy between what you reported and what the bank reported to them.

How sign-up bonuses affect your tax bill

A sign-up bonus increases your taxable income for the year, which may push you into a higher tax bracket or reduce a refund you were expecting. The tax impact depends on your total income and filing status. If you received a $500 bonus and you are in the 22% federal tax bracket, you will owe approximately $110 in additional federal tax on that bonus (before accounting for state tax or other factors).

If you received a large bonus and are concerned about the tax hit, you can set aside money throughout the year to cover the tax bill, or you can adjust your withholding on your W-4 form if you have an employer. Some people factor the tax cost into their decision about whether to open an account for the bonus — if the bonus is $100 but you will owe $22 in federal tax, your net gain is $78. Self-employed people and those with other sources of income should be especially careful to report bonuses, because the IRS cross-checks 1099 forms against tax returns and a missing bonus can trigger an audit notice.

Frequently Asked Questions

Do I have to report a sign-up bonus if it was under $10?

Yes. Even if the bank does not issue a 1099 form, you must report any sign-up bonus you received on your tax return. The reporting threshold does not change the tax requirement — it only determines whether the bank sends you a form. Report it on Schedule 1 under Other Income.

What if I opened multiple accounts at the same bank and got multiple bonuses?

Each bonus is taxable income. The bank will list all bonuses on one 1099-MISC form, or on separate forms if they are large enough. Add up all the bonuses and report the total on your return. If the bank's form combines them, you report the combined amount. If they are listed separately, you add them together.

Can I deduct the bonus as a business expense if I opened the account for my business?

No. Sign-up bonuses are taxable income, not deductible expenses, even if you opened the account for business purposes. You report the bonus as income and cannot offset it with a deduction. However, any interest the account earns is also taxable income.

What if the bank sent me a 1099 but I never actually received the bonus?

Contact the bank immediately and ask them to investigate. If you did not receive the bonus, the bank should not have issued a 1099. Request a corrected form that shows zero income. Do not file your return until this is resolved, because filing with a bonus you did not receive will create a mismatch between your return and the bank's report to the IRS.

Does a sign-up bonus count as income for student loans or benefits?

It may. Some federal student loan programs and means-tested benefits (like SNAP or Medicaid) count all income, including sign-up bonuses, when determining your income level. Check the specific program's rules. For student loans, report your total income including bonuses on the FAFSA. For benefits, contact the agency administering the program.