What is the tax on international cash prizes?

Answer by  Dean (4035)

Monies earned or awarded outside the United States are not subject to U.S. taxes. It is wise, of course, to consult a tax professional for the last word on the subject, particular since the tax laws change so often.

Answer by  cgroverla (516)

If you are subject to US income tax, you are taxed on your worldwide income. Your international prize money is reported as other income on Form 1040. If you have paid foreign tax on your prize, you may receive a credit on that tax paid on your US tax return.

Answer by  Christian9247 (5042)

Depending on the country you come from will determine how this is handled. If you are in the United States you are taxed on everything worldwide. If you have already paid a tax on this prize money in a foreign country you can submit for a tax credit. The minimum tax is 25%.

Answer by  y3636363 (1380)

Well that tax depends on the country you are bringing your cash into. If you live in the states you will be charged the tax in the amount of your province.

Answer by  Att4372 (1704)

A cash award (Nobel Prize, for example) is considered ordinary / unearned income. Ordinary means no special preference, so you pay regular income tax rates. Unearned means you did not do specific work to get this money, so you don't have to pay FICA (Social Security or Medicare tax). Most states also tax this as ordinary income.

Answer by  tamarawilhite (17883)

You will have to pay your state income tax and federal income tax on the cash prize. This will depend on your income level, but is a minimum of 25%.

Answer by  MSH (305)

The cash prize is income and you most likely will have to pay income tax if you want to use any of the money in the United States or in the State in which you reside. not to mention you may be responsible for taxes in the country in which you won the cash