What Sweepstakes Winners Need to Know about 1099 Forms

Handy Information for Winners About 1099-MISC Forms

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Won Prizes? Here's What You Need to Know About 1099 Forms. Ken Reid / Getty Images

If you won a prize and have filled out an affidavit to receive it, the sponsors of the sweepstakes are planning to report the win to the IRS. That means that you should be on the lookout for a 1099-MISC form.

The 1099-MISC form is used to report miscellaneous payments to non-employees. Any sweepstakes prizes are considered to be miscellaneous payments (as the IRS puts it: "include amounts paid to a winner of a sweepstakes not involving a wager.")

Having your 1099-MISC forms from each of your prize wins helps you record the correct amount to use when you do your taxes. Here's what you need to know about them:

What Information Does a 1099-MISC Contain?

Your 1099-MISC forms will include information that helps both you and the IRS accurately report the income you received by entering sweepstakes. (Remember that the fair market value of any prize is considered income). Your 1099-MISC forms will include:

  • The sponsor's, name, address, and tax ID number.
  • The value of the prize.
  • Your name, address, and social security number.
  • The tax year that the 1099 form applies to.
  • Any other relevant information.

You can view a blank 1099-MISC form by visiting the IRS website.

When Will Sweepstakes 1099 Forms Arrive?

According to the IRS 1099-MISC guidelines, sweepstakes sponsors must mail a copy of the 1099-MISC form postmarked by January 31st of the year following the year in which you won the prize.

For example, if you won a prize in May of this year, your 1099 should be mailed by January 31st of next year.

The 1099 will be sent for the year in which you receive a prize, not the year in which you win a prize. So if you win a car this year but take possession next year, you can expect to get the 1099 by early February of next year. If the sponsor sends the 1099 early, you can dispute it with them.

Note that sponsors can choose to send 1099 forms earlier, if they want. Some send them shortly after awarding the prize, for example.

What Happens If I Don't Receive a 1099 Form for My Win?

The IRS has the following to say about what to do if you do not receive an expected 1099 form:

If you have not received an expected Form 1099 by a few days after that, contact the payer. If you still do not receive the form by February 15th, call the IRS for assistance at 800-829-1040.

Remember, however, that you don't need a 1099-MISC form to report your sweepstakes prizes. You should be tracking your prize wins so that you know how much you won during your tax year. And you are legally required to report any prize win, even if the sponsor doesn't ask for your social security number to report the prize to the IRS from their side. So you're not off the hook for reporting your prize winnings, even if a 1099 form never appears.

What Happens If My 1099 Form Shows the Wrong Prize Value?

Remember that you only have to pay sweepstakes taxes on the fair market value of your prize, which can be different from the value that the sweepstakes sponsor estimated when they offered the prize. For example, if it takes a while for a prize to arrive, the item might be selling for far less than it was when the sweepstakes' rules were drafted.

If you feel that the prize value on your 1099 form is too high, you should read How to Dispute an ARV on Your Sweepstakes Taxes.

If you made a mistake on your tax forms and need to correct the amount you reported, the IRS website offers instructions on how to do so.

Do I Need to Send My 1099 to the IRS?

No, the IRS will receive a copy of the form from the sweepstakes sponsor. You only need to enter the prize value into your miscellaneous income and keep the 1099 for your records as proof of your sweepstakes income.

Disclaimer:

This is intended to be a general overview of how sweepstakes taxes work in the United States. Tax laws change frequently, and the most recent information can be found on the IRS website. I am not a tax professional, and this article is not intended to be legal advice. Your situation may be different, and you should always consult with a knowledgeable professional if you are unsure about anything to do with your sweepstakes taxes.