# Taxes on new account bonus and credit card cashback



## mina124 (Dec 30, 2011)

Hello,

I tried finding an answer for this question but I can not. Sorry, if it is already discussed in other thread. 

I wonder if any of these should be reported for income tax in line-121 similar to interest.

[1] A bonus for opening a new account (ING direct); a bonus for setting up pre-authorized payment ($10 a month * 5).
[2] A cash back for getting a new credit card ($100 from MBNA)
[3] A cash back for purchases using credit card. 

I did not get T5 for any. Some were over $50.

Thanks,
Mina


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## Latito (Nov 18, 2013)

For *#3*, I'm quite sure that the CRA views that as a price reduction on your purchase (1% cash-back is equivalent to a 1% sale on the item) so *no tax*. I don't know how the others would be handled.


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## AltaRed (Jun 8, 2009)

I would suggest none of these are taxable events. They are typically handled as a negative administrative charge. In the remote chance I am wrong on the #1, ING would include it on a T5 for the applicable tax year.


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## Zeeshanbmerchant (Jan 4, 2014)

Hi 

I think there is such a thing as going too far, i mean would you declare finding a $50 bill?

Having said that the above poster is correct, both the ING and MBNA are viewed as a rebate on future costs, discounts

here is a nice video showing the process from turbo tax

https://turbotax.intuit.com/tax-too...sh-Back-Rewards-Taxable-Income-/INF20522.html

enjoy


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## mina124 (Dec 30, 2011)

Thanks all for the answers. Then, I will report just the interest :encouragement:


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## balexis (Apr 4, 2009)

Some additional information if one is using a personal credit card with a loyalty program for purchases reimbursed by your employer. Cashback & some other bonuses are taxable:

http://www.cra-arc.gc.ca/tx/bsnss/tpcs/pyrll/bnfts/lylty/xmpls-eng.html

But as Zeeshanbmerchant mentioned, I think there is such a thing as going too far...


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## Guban (Jul 5, 2011)

I agree that none of the events listed are taxable. A more substantial one that can happen occurs when a discount brokerage "bribes" you to come over to them. Canadian Capitalist recently mentioned such a "bribe" when he transferred over to CIBC (I believe). I'm still waiting for one like when RBCDI offered 1% a while ago. That could be worth thousands! Who says that we can't be bought?


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## fraser (May 15, 2010)

I would not report any of it. All of these were based on purchases using after tax income.

Each year I get a T5 slip from the co-op that we belong to. The slips shows the amount that the coo-op returns to me each year, plus taxes withheld (very small amount). My tax accountant tells me that this is for personal purchases and does not have to be included in my tax return. The withholding tax is.


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