do I really not have to include UA miles/awards on my tax return?
May 18, 2020, 12:43 pm
#31
Join Date: Jun 2014
Programs: UA MM
Posts: 4,107
As a general rule in the USA anything you receive in any form is taxable unless there is an exemption or a deferral. I cannot remember why for customers the FF programs are not taxable (as before I moved to the USA) but there is a regulation (Treasury) or ruling (IRS) that provides an exemption for the customer.
For the employees of the airline the taxation of an employer provided fringe benefit depends upon whether it is a no cost (or falls within a certain discount percentage) and then it is an exempt (non taxable) fringe benefit to the employee.
The rules in other countries are unique to each country.
The above is not tax advice, just for informational purposes only (and probably far more information than you wanted).
For the employees of the airline the taxation of an employer provided fringe benefit depends upon whether it is a no cost (or falls within a certain discount percentage) and then it is an exempt (non taxable) fringe benefit to the employee.
The rules in other countries are unique to each country.
The above is not tax advice, just for informational purposes only (and probably far more information than you wanted).
May 18, 2020, 4:01 pm
#32
FlyerTalk Evangelist
Join Date: Nov 2014
Location: MSP
Programs: DL PM, UA Gold, WN, Global Entry; +others wherever miles/points are found
Posts: 14,395
As a general rule in the USA anything you receive in any form is taxable unless there is an exemption or a deferral. I cannot remember why for customers the FF programs are not taxable (as before I moved to the USA) but there is a regulation (Treasury) or ruling (IRS) that provides an exemption for the customer.
If you receive miles from a source where you didn't pay for them (CC use counts as "paying" because you're doing business with the bank), then you realize ordinary income.
May 19, 2020, 7:40 am
#34
FlyerTalk Evangelist
Join Date: Nov 2014
Location: MSP
Programs: DL PM, UA Gold, WN, Global Entry; +others wherever miles/points are found
Posts: 14,395
You can report it as Miscellaneous/Other income (2019 Form 1040, Schedule 1, line 8) just as if you got one. However, most taxable sources of miles (sweepstakes, Bug Bounty, etc.) also generate a 1099-MISC. The UA employees on the other thread were having the severance miles added to their W-2 as compensation income.