Citibank sends out tax forms for frequent flier miles

January 24, 2012 3:20:48 PM PST
A major bank thinks the frequent flier miles it gives out to customers are taxable.

The LA Times is reporting that Citibank is sending out tax forms to people who received thousands of airline miles as a reward for opening an account. The tax forms value each mile at two-and-a-half cents.

Airline miles are a popular reward given out by credit card companies and they typically are not listed as taxable income. However, Citibank says the reward miles are listed as taxable income in the Internal Revenue Code and that is disclosed to customers before they decide to accept them.