Account Director, Cheryl Thornton provided updates for 2026 in this informative post on what sponsors need to know about filing and processing winner W-9’s and 1099’s for their promotions.
There is an important update that all Sponsors of Promotion Games of Chance need to know concerning filing and processing winner W-9’s and 1099’s in 2026. Back in 2016 we posted an article on our website explaining how Sponsors offering and awarding prizes valued at $600 or more were responsible for obtaining a signed, legible copy of an IRS form W-9 from every winner that they issue a prize to. However, beginning January 1, 2026, the minimum amount for issuing 1099-MISC (for miscellaneous income) will increase from $600 to $2,000.
What does this mean to Sponsors and/or payers (filers)? This change reduces their administrative burden; for example, they will need to issue fewer 1099 forms, which can save time and reduce internal costs. But they must still continue their record keeping process (track and document all payments) even for those below the $2,000 threshold as the prize (“other income”) is still taxable to the winners.
This change does not affect the process. The Sponsors must still send a copy of the 1099-MISC form to the appropriate Winners by mail, postmarked by January 31st of the year following the year in which said prize was won, and to the IRS by February 28th. The associated penalties may be imposed by the IRS if this requirement is not adhered to. The Official Rules governing the Promotion and the notification documents sent to the potential winners should clearly state what the requirements of accepting a prize entails, the forms that you are requesting them to fill out, and how their tax information will be used. All completed W-9 forms containing sensitive information must be kept private and secure.
Although we are not tax lawyers, we are knowledgeable professionals and want to make clear that if a Winner wins a prize valued under $2,000 in 2026, they will not receive a 1099 form; however, this does not preclude them from reporting their winnings as “other income” and from paying income taxes.
Since this is a federal change, we also recommend that Sponsor’s, payers and winners be aware of their own states laws and regulations as they may not conform to this new federal thresholds.
In closing, it is important to note that the current $600 threshold remains in effect for all winners receiving prizes during calendar year 2025. This means that for 2025 tax forms filed in early 2026, the old $600 rule still applies.
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