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Level 1

Solved

Scholarship Sweepstakes Winnings

Forum|Forum|3 years ago
April 12, 2023
1 reply
0 views

Hello -

My son won $10,000 through our state's Health Department Scholarship Sweepstakes. The money was placed into a 529 with the Health State Department as the Owner and my son as a beneficiary. Do I need to report this to the IRS? If so, does my son file a return or can I report it under our tax return?

Not A Product Question

Best answer by JamesG1

Expert Reviewed

Did the state Health Department report income on an IRS form 1099-MISC or IRS form W-2G? If they did, the tax document should report your son's Social Security number and you would report the prize on your son's 2022 Federal 1040 tax return.

Payments by Federal, state and local government agencies are required to report such payments.

If the state did not report the prize as income, it may have been determined that your son did not constructively receive the award in 2022.

Internal Revenue Code 26 CFR § 1.451-2 - Constructive receipt of income may be found here.

Level 15

Expert Reviewed

Did the state Health Department report income on an IRS form 1099-MISC or IRS form W-2G? If they did, the tax document should report your son's Social Security number and you would report the prize on your son's 2022 Federal 1040 tax return.

Payments by Federal, state and local government agencies are required to report such payments.

If the state did not report the prize as income, it may have been determined that your son did not constructively receive the award in 2022.

Internal Revenue Code 26 CFR § 1.451-2 - Constructive receipt of income may be found here.

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