I may not be the first to tell you, but don’t forget about an additional benefit of the 870-page One Big Beautiful Bill Act passed in July.
As prize promotion sponsors and administrators know, an IRS Form 1099-MISC is used to report non-wage income not covered by another 1099 Form and includes income from prizes. As you also know, the reporting threshold for the 1099-MISC has been $600.
However, for tax year 2026, because of the One Big Beautiful Bill Act, the reporting threshold will increase to $2,000 and will be adjusted for inflation in subsequent years.
What does this mean?
- Prize winners are still responsible for reporting prizes as income on their tax returns.
- Sponsors, administrators, and prize-providers do not need to get specific information from the prize winner to complete a Form 1099-MISC, including their social security number, unless the prize is $2,000 or greater and is awarded in 2026.
- Sponsors, administrators, and prize-providers do not need to file with the IRS or provide to the winner a Form 1099-MISC unless the prize is $2,000 or greater and is awarded in 2026.
What do you need to do?
- Make sure your Official Rules continue to provide that “Winner is responsible for all taxes on prize.”
- When any prizes are $2,000 or greater and will be awarded in 2026, you can say something in your Official Rules like “Winners of prizes $2,000 or greater will be required to provide information to Sponsor or Administrator, including their social security number, for tax reporting purposes, and will be provided an IRS Form 1099-MISC for the value of the prize.”
And special thanks to Judy Goldstein, from Catalyst International, for pointing out this additional benefit of the One Big Beautiful Bill Act.
