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

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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should you tell the sponsor that the 1099 isn't necessary, or is it not worth it and you should just go along with the outdated way they have it?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?
 
Guess I missed the 2026 rule change to $2,000. Should still keep copies any win values, emails or other information.
 
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
 
rissaroorich said:
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should you tell the sponsor that the 1099 isn't necessary, or is it not worth it and you should just go along with the outdated way they have it?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?
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This is probably going to cause confusion throughout 2026. A lot of sweepstakes rules are written well in advance and may not have been updated after the legislation changed. I'd save the correspondence and keep records of the prize value either way.
 
@lissvarna No, the $2,000 isn't the amount you have to claim. It's only the point where a sponsor has to send you (and the IRS) a Form 1099-MISC. All sweepstakes prizes are still taxable income, whatever their value, and you're expected to report them on your return even if you never get a 1099.

What changed for 2026: sponsors now only have to issue a 1099-MISC when the prizes they give you add up to $2,000 or more during the calendar year. It used to be $600. That total is per sponsor, so two $1,200 prizes from the same sponsor in 2026 would still get you a 1099. Starting in 2027, the $2,000 will be adjusted for inflation.

Like @bennet332 said, a lot of official rules were written before the change, so you'll still see $600 in them, and some sponsors may ask for your SSN or a W-9 anyway. Either way, keep your win emails, affidavits, and prize values for your records. For your own situation, check with a tax professional.

Sources: IRS 1099-MISC instructions and Verrill's note for sponsors.
 
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