What do you do when sponsors still have the $600 tax threshold in their rules instead of the new $2000?

R

rissaroorich

New member
I've noticed this year that a lot of sweepstakes rules still have the old $600 1099 tax reporting threshold in their rules instead of the new $2000 threshold, which went into effect in 2026. If someone were to win a prize that's over $600, but less than $2000, should you tell the sponsor that the 1099 isn't necessary, or is it not worth it and you should just go along with the outdated way they have it? Have any of you faced a similar situation this year with any of your wins?
 
There are some accounting things that factor into this like "real world value". Sometimes the ARV is not the real world value and people can request that from the sponsor instead if paying tax on the full rules ARV. This is all in the event that they are the winner of a substantial prize. Every sponsor can handle thus differently and you should always consult a tax professional.

For a 2026 prize between $600 and $1,999, you can politely note the new federal threshold, but for most people it is usually not worth pushing hard. Many sponsors will still follow their old process (or their agency’s), and a 1099 issued below the required amount is allowed—it doesn’t change what you actually owe
 
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