Prizes won by contestants at a powwow are taxable. You report prizes that aggregate $600 or more in a calendar year on Form 1099-MISC, Miscellaneous Income PDF, in block 3 as "other income." In order to fill out the form correctly, you must obtain the winner’s taxpayer identification number (TIN). Use Form W-9, Request for Taxpayer Identification Number (TIN) and Certification PDF to request the TIN. Use Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding PDF instead of Form 1099-MISC to report prize money won by contestants who are nonresident aliens. Foreign persons can’t use Form W-9. Normally, Form W-8 BEN, Beneficial Owner’s Certificate of Foreign Status for U.S. Tax Withholding PDF. Generally, these payments are subject to 30% withholding. However, the winner may be entitled to claim a tax treaty exemption from withholding on some or all compensation. Winners who wish to claim this exemption must provide you with Form 8233, Exemption from Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual PDF. Find out more about the reporting and filing requirements for foreign persons.
