Similar to lottery winnings, winning a prize subjects the recipient to income tax. Section 74 of the tax code states that prizes and awards are included in gross income unless these items qualify as excluded as noted in this section or are considered scholarships and fellowship grants under Section 117. Gregory R. Hampton, who recently won 100 years of season tickets for his beloved New York Giants as part of the NFL’s Tickets for 100 years contest, is therefore responsible for the taxes on his winnings. Luckily for Mr. Hampton, the NFL announced that they will be paying the estimated taxes on the winnings.
Upon winning any sort of gambling, raffle, lottery or other similar prize, one must report the full amount of the winnings for the year on their form 1040. One may itemize deductions on Form 1040 to take advantage of any gambling losses but may not net their winnings and losses. Interested in learning more? Contact the experienced attorneys of Morris Law Group.