Sweepstakes Winners: W-9’s and 1099’s

Posted by Jennifer Hibbs on June 28, 2016 in Articles, compliance, Legal, Prizes | 14 Comments

14 Responses to Sweepstakes Winners: W-9’s and 1099’s

  1. steve talkington says:

    Do I have to pay tax on a sweepstakes winning to recieve the check for that winning. I don’t have the money to pay up front tax can it be paid later after I get the winning check (2.5m).

    • Jennifer Hibbs says:

      Typically in the US you would only pay taxes on winnings when you file your regular tax return.

      • C says:

        If you win a large sweepstakes prize, what percent goes to IRS for the taxes on it, and what are the legal ways to reduce the amount paid? Please reply!

        • Jennifer Hibbs says:

          Please refer to the above information. All prizes won should be reported to the IRS on your tax form, either with a 1099 or as “other income” if the prize(s) are valued at $599 or less. You would need to consult an accountant or tax professional with any tax questions you have on specific prizes you have won.

  2. Dessa says:

    I have a quick question – There are three parties involved (1) the company donating the item (“Donor”), the business hosting the auction (“Auction”) and the (“Winner”). You use the term Sponsor in your post but it is unclear to me if the Sponsor is the Donor or the Auction? Can you please confirm which exact party has to file the 1099s? If the Donor gives the item to be auctioned to the Auction do they still have to file the forms. Interested to hear your thoughts.

    • Jennifer Hibbs says:

      The Sponsor is the company that is running the sweepstakes. It sounds like your example is not a sweepstakes or contest at all. You would need to consult your attorney as to who is responsible in your particular situation. If you need help and would like assistance in generating 1099s in the future, please contact us as we can help.

  3. Jason Greene says:

    If my son (15) won a contest to travel abroad to attend a professional soccer match, airfare, accomadations, etc totaling $8,500 (approx. value). Will he have to pay tax on this trip or will I? He does not have any income.
    Thank you!

    • Jennifer Hibbs says:

      Check the contest rules. They should state who would be responsible for US taxes if the prize is won by a minor (or even if minors are eligible to enter).If the rules says that if a minor wins the prize it will be awarded in the name of the parent/legal guardian, then the parent/legal guardian would be liable for the taxes. If they say it would be in the name of the child, then you should check with your accountant/tax preparer; professional advice would be required to ascertain if the child should file that amount themselves or if they can file it as a dependent.

  4. T says:

    If you have a winner is from another country win a prize in the US. do they still get a 1099 form or another form?

  5. Stephanie Phelps says:

    We had a raffle and the winner was drawn right at the end of December. The winner was notified via telephone in December and paperwork was sent to the winner for completion. However due to the holidays, the winner did not return his completed paperwork or receive his prize until now in January. Do we issue the 1099-misc for the 2017 tax year or the 2018 tax year as this is the year he actually received his prize? Any advice is appreciated. Thank you in advance.

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