Do I Have to Pay Taxes on Game Show Winnings and Prizes?

Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
Key takeaways
- The IRS considers game show winnings to be part of your taxable income.
- The larger the winnings, the more taxes you will potentially have to pay.
- The value of noncash prizes is considered taxable income, too.
Are game show winnings and prizes taxable?
- If you win at least $600, you’ll probably get a 1099-MISC tax form from the entity that awarded the cash prize, and that entity will also send a copy to the IRS
. - Keep in mind that even if you don’t get a 1099, you still have to report the value of your winnings when you file your annual tax return.
- Federal: $79 to $139. Free version available for Simple Form 1040 returns only.
- State: $0 to $69 per state.
- Expert help or full service filing is available with an upgrade to Live packages for a fee.
What kind of tax will you have to pay on winnings?
What tax bracket will you be in after winning your money?
What if you win something other than money?
Are game show winnings taxed differently than gambling winnings?
- Federal: $79 to $139. Free version available for Simple Form 1040 returns only.
- State: $0 to $69 per state.
- Expert help or full service filing is available with an upgrade to Live packages for a fee.
How to keep your head above water after winning a game show prize
- Consider taking cash instead of an object. If you win a vacation valued at $15,000, for example, ask if you can just have the $15,000 instead. That’s because you could owe thousands in taxes, which is a lot of cash to come up with for a supposedly “free” vacation. You may be better off taking the money and then using it to pay for a smaller, more affordable trip
- Know the exact value of your prize. The entity giving you the prize may slightly inflate the value to entice more people to compete or to create a larger tax deduction for itself. That $15,000 vacation may not really be that expensive. Contest the company’s valuation, if necessary.
- Don’t be afraid to turn down a prize if it might become a tax burden. If you win a car that comes with a $5,000 tax bill, are you financially able to set aside that much cash for the taxes? Maybe you can sell it and come out ahead, but it’s important to be realistic and not let shiny objects blind you to tax consequences. You can always use cash prizes to cover the associated tax bill, but scrounging for cash to pay the taxes on objects or vacations may make them not worth the trouble.
Article sources
- 1. Internal Revenue Service. About Form 1099-MISC, Miscellaneous Information. Accessed May 30, 2024.
with LedgerWay