It has recently been asked whether cash back rebates are taxable or not. The Wall Street recently did an article on the topic. They found that the IRS has not made any official policy on whether cash back rebates from credit cards should be taxable or not. They also noted that a private letter ruling in 2002 indicated that cash back rebates are not considered income by the IRS.
So this is basically good news. You won't get into any sort of trouble for not reporting your rebate checks as income on your taxes. Some people make up to $2000 a year in their cash back rebates by getting their 1-5% rewards everytime they shop. For those that don't have cash back credit cards, they should definitely consider getting one.
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