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How bank account bonuses are taxed

By the RateHerald team · Updated Oct 9, 2026

A cash bonus for opening a checking or savings account is taxable income, like interest. Banks usually report it on Form 1099-INT, sometimes on Form 1099-MISC, and you owe federal tax at your ordinary rate, plus state tax in most states.

Bonuses count as income

The IRS treats money or gifts a bank gives you for opening an account or making a deposit as interest (IRS Topic 403). A $300 checking bonus adds $300 to your income for the year the bank pays it, whether or not you keep the account open.

Which form you’ll get

• Form 1099-INT: most banks report a bonus as interest in box 1, and must send the form when your interest for the year, bonus included, reaches $10.
• Form 1099-MISC: some report it as other income in box 3, which the rules require only for larger amounts: $600 or more through 2025, and $2,000 or more for payments from 2026.

You owe the tax whether or not a form arrives. A bonus under the reporting threshold is still income.

How much tax

The bonus is taxed at your ordinary income tax rate, not a special rate. In the 22% federal bracket, a $300 bonus costs $66 in federal tax, leaving $234, before any state tax. Most states tax it too; a few, such as Texas and Florida, have no income tax.

Weighing a bonus against a savings rate

Because interest and bonuses are taxed the same way, the fair comparison is before tax: a bonus that asks you to keep $10,000 in an account for 90 days is worth comparing with what that $10,000 would earn in a high-yield savings account over the same 90 days. RateHerald’s bonus list shows that yearly rate where the bank states the balance and the time.

Credit card bonuses are different

A card’s welcome bonus earned by spending is generally treated as a rebate on what you bought, not income. Card bonuses that need no spending, or that come from opening a bank account linked to the card, can be reported as income. If an issuer sends you a 1099, it has reported the bonus as income.

This is general information, not tax advice; a tax professional can say how it applies to you.