Generally, cashback rewards earned through an item purchases are typically considered rebates or discounts and are not considered taxable income. The IRS (US Tax Agency) and CRA (Canada Tax Agency), generally don't consider cashback rewards as taxable income because they are viewed as a reduction of the purchase price rather than additional income.

However, there are some exceptions to consider:

Sign-up Bonuses: Some credit cards offer sign-up bonuses in the form of cashback or points. In some cases, the IRS and CRA may consider these bonuses as taxable income.

Interest and Investment Earnings: If you earn interest on your cashback rewards or invest them, any earnings may be subject to taxation. This is more relevant if the cashback is in the form of points that can be converted to cash.

Tax Laws in Different Countries: Tax laws can vary by country, and some jurisdictions may have different rules regarding the taxation of rewards. It's essential to be aware of the tax regulations in your specific location.