Are bank bonuses taxable?
Updated
Not tax advice
Bonus Tally is an information service, not a bank or a financial adviser. Nothing here is financial, tax or legal advice.
The short answer
Bank bonuses are generally taxable as interest income, and banks usually report them on Form 1099-INT. The IRS says you must report all taxable interest on your federal return even if you do not receive a Form 1099-INT (IRS Topic 403).
Form 1099-INT
You should receive Form 1099-INT from a payer that paid you $10 or more in interest during the year (IRS Topic 403). Box 1 holds taxable interest of $10 or more (IRS instructions for Form 1099-INT). When a bank treats the bonus as interest, the bonus is part of that figure, together with any interest the account itself earned.
The rule reaches gifts too. IRS Publication 550 says the value of a noncash gift for opening an account or making a deposit may be reported as interest: above $10 for deposits under $5,000, and above $20 for deposits of $5,000 or more (IRS Publication 550).
Form 1099-MISC
Some banks report a bonus as other income on Form 1099-MISC instead. Box 3 of that form takes other income of $2,000 or more, the threshold for tax years beginning after 2025 (IRS instructions for Forms 1099-MISC and 1099-NEC). A smaller bonus reported this way may arrive with no form at all. Ask a tax professional how to report it.
Of the 34 offers we listed on October 6, 2026, 19 named Form 1099-INT in their terms, 1 named Form 1099-MISC, and 14 did not say. Each offer page shows the form only when the terms name it.
| Form | Box | Reporting threshold | Source |
|---|---|---|---|
| Form 1099-INT | 1, taxable interest | $10 or more in the year | IRS |
| Form 1099-MISC | 3, other income | $2,000 or more, tax years after 2025 | IRS |
Which year the bonus counts
Generally the year the bank credits the bonus to your account, not the year you opened it. IRS Publication 550 says you receive interest on a bank deposit when it is credited to your account and you can withdraw it (IRS Publication 550). An account opened in November can pay its bonus in February, and the bonus then belongs to the following tax year.
Your Social Security number and backup withholding
Banks ask for your taxpayer identification number, usually your Social Security number, when you open an account. If you do not give it in the required way, or the IRS tells the bank it is wrong, the bank must withhold 24% of interest payments as backup withholding (IRS Topic 307).
Records to keep
Keep the date you opened the account, the date the bank credited the bonus and a copy of the offer terms. Compare them with the form the bank sends. If a Form 1099-INT shows the wrong amount, IRS Publication 550 says to ask the issuer for a corrected form (IRS Publication 550).
State income tax
States set their own rules for interest income. Your state's tax agency publishes how it treats it.
What a bonus leaves after tax
The calculator takes your own tax rate, federal and state together, and shows a second figure next to the net gain, labeled after tax at your rate:
- After tax at your rate
- (bonus + account interest - cost of parking the cash) x (1 - your rate / 100) - fees
- Example
- ($200 + $86.30 - $98.63) x 0.78 = $146.38a 22% rate
The example is a $200 bonus for $10,000 kept 90 days in an account paying 3.5% APY, against a 4% savings rate elsewhere. The interest the cash would have earned elsewhere would have been taxed too, so it comes off before the tax rate applies. Fees come off after it: the calculator does not reduce your taxable income by them.
The rate you enter is your own assumption. The calculator does not know your bracket, your state or your deductions, and it leaves the field empty until you fill it.