If you receive a payment that meets the criteria for taxable status, you will likely be issued a year-end tax statement at the end of the tax year in which the payment was received. These statements are important as they detail the total prize amount received so that you can properly report it when you file your taxes.
When onboarding, you may have the option to select how you would like to receive these statements. Selecting e-delivery will allow you to access and download an electronic version of your tax statements through your Prize Payments account or your email. To receive a paper statement, you can select the option for physical delivery or reach out to us and request that a copy be mailed to you.
This setting can be adjusted at any time prior to delivery by logging in to your account and updating the delivery preference in the Tax Forms section.
If you are a US person
We are required to issue a Form 1099 to you if you have received at least $600 or more in payments during the tax year. For prizes and awards or other income, we file a Form 1099-MISC which is used to report miscellaneous income, or income that is earned outside of your employment. This form will provide you with the total for the payments that you have received for the year as well as any taxes withheld, if applicable.
In general, income that is reported on your Form 1099-MISC is taxable and must be included with your tax return. It's best to consult a tax professional if you're unsure whether you need to pay taxes on your 1099-MISC income.
You can learn more about Form 1099-MISC on the IRS website here.
If you are a non-US person or business
When receiving payments for prizes and awards or other income that is sourced from the United States, this income is generally subject to U.S. federal taxes. For this purpose, we are required to issue a Form 1042-S to you for any payments received during the tax year. The Form 1042-S that we send to you will provide you with the income code and the total for the payments that you received along with any tax withholdings.
You can learn more about Form 1042-S on the IRS website here.