This question comes to me from readers every year. Are Airlines miles taxable (in the US)? Especially if you redeemed them (you claimed their value). Or if you earned them while traveling for company business (tickets paid for my the company – are the miles taxable as income). The answer to all these, to the best of my knowledge is, no they are not taxable. For specific scenarios, I always suggest you check with an accountant, especially if you got a 1099 from a bank for Airline Miles earned. For more details, read my earlier post on this topic of Taxes and Airline Miles. As per the future, who knows, the US government is trying to tax everything!
From April 2010: Airline Miles and your Income Taxes
See also: Are Banks sending 1099s for Airline Miles?