Hello, THANK YOU for choosing Just Answer. My goal is to help make your life...a little...LESS taxing.
The winner will get taxed on the $10,000.00. A W2-G is the form issued for gambling, raffle, lottery, sweepstakes winnings, things of that nature. As these winnings are considered taxable income
, the payer is required to report the winnings on this form to the payee. Please note that the winnings have to be reported to the IRS
as well. The winner is required to declare this income
on his/her tax return
The procedure for paying the winner is issue the person a check, report the winnings on the W2G. A copy of the W2G goes to the winner, the payer keeps a copy, and the IRS gets a copy. Refer to the above instructions for more detailed information.