Q: The last big winner on “Jeopardy!” won well over $100,000. Ellen regularly gives away $5,000, $10,000 and new cars on her show. Who has the tax responsibility for this money? Does the recipient/winner declare the money as ordinary income?
—Sydney Laird, Duluth
A: The money or prizes won on game or talk shows must be treated like income and reported on taxes.
Those who win large awards like a Nobel Prize can immediately transfer the money to a nonprofit and avoid paying taxes, Atlanta tax attorney James G. Killough told Q&A on the News, but for prizes from TV game and talk shows, the winnings must be reported on Line 21 of the tax form.
It is not self-employment income, however, so the winnings are not subject to Social Security taxes.
If you win more than $1,500 on “Jeopardy!” – meaning you finished first or second – the show will retain 7 percent of winnings over that amount for California taxes.
For Canadian residents, the show takes out an additional 30 percent to send to the IRS for a total tax liability of 37 percent, Alison Shapiro, a spokeswoman for Sony Pictures TV and CBS TV Distribution, which produces “Jeopardy!,” told Q&A on the News in an email.
“It is then, of course, the responsibility of the winner to file the (1099-Miscellaneous Income form) with their tax return and make sure that all tax liability is met,” said Shapiro, who was a contestant on the show in 2013.
Andy Johnston wrote this column; Allison Floyd contributed. Do you have a question about the news? We’ll try to get the answer. Call 404-222-2002 or email q&a@ajc.com (include name, phone and city).
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