What is the tax on cash prizes?

Answer by  Chaneygirl (1755)

There is no flat amount. Cash prizes are taxed at your ordinary income rate. Include it on line 21 form 1040. Tax can vary from 10% to 35% depending on the prize amount and your other income. If your state has income tax, it would be taxable there as well.

Answer by  Chaneygirl (1755)

Cash prizes are taxed at the same rate as your other income. If you are in the 15% bracket, then 15%. It may put you in a higher tax bracket.

Answer by  naveensolanki (31)

it is same as for normal tax slabs. it should be tax free as prize is a great motivation to perform