The 1099 rule just changed. $600 → $2,000.

What actually changed

Under the One Big Beautiful Bill Act, prizes awarded after December 31, 2025 are only reportable on a 1099-MISC once they hit $2,000 — up from the $600 threshold that stood for decades. Sites no longer even need to collect a W-9 from you below that line.

Applies to prizes, awards and contest winnings on Form 1099-MISC. Indexed for inflation starting 2027.

Two things the change did not touch: the 300× odds multiple that sports-wagering W-2Gs also have to clear, and withholding — payouts of $5,000 or more still carry 24% federal withholding exactly as before.

Practically: a $1,200 year on a sweepstakes app used to generate a form. In 2026, it doesn't. No 1099 gets filed, and the IRS never receives a copy — so there's nothing for their systems to match against.

But here's the part people get wrong

The threshold isn't per prize. It's the total you win from one sponsor across the whole calendar year. Four separate $600 cashes on the same site add up to $2,400 — over the line. That site is required to file a 1099-MISC, and it will.

Net or gross? It depends on the site.

This trips up almost everyone, and the honest answer is that the $2,000 isn't measured the same way everywhere.

1. Entry-fee contest sites (DFS-style) generally report your NET.Platforms like FanDuel and DraftKings compute something close to prize winnings − entry fees + bonuses for the calendar year, and file only if that net figure clears the threshold. So $8,000 in prizes against $6,500 in entry fees is $1,500 net — under the line, and likely no form.
2. Sweepstakes and free-to-enter promotions are effectively GROSS.There's no entry fee to subtract, so the reportable number is the cumulative fair market value of what you won — cash, gift cards, trips, merchandise, all of it.

Why the forms you never see are the dangerous ones

Once a site files that 1099, the IRS has it — permanently, under your Social Security number. Their Automated Underreporter system mechanically compares every form filed under your SSN against what you actually reported. A form on file that's missing from your return is a mismatch, and mismatches generate a notice called a CP2000.

And here's the thing: you don't have to receive the form for the IRS to have it. Their copy and your copy are separate deliveries. Sites deliver electronically now — a PDF parked in a tax-documents tab you haven't opened in eight months. Addresses go stale. Portals get forgotten. Sometimes the form just quietly never arrives.

The letter comes late — which is why it hurts

CP2000 notices typically arrive 12 to 18 months after you file, sometimes as long as two years. The return goes in, nothing happens, and it feels finished. Then a letter shows up about a tax year you'd stopped thinking about.

By then it isn't just the tax. There's a 20% accuracy penalty, failure-to-pay penalties of 0.5% per month, and interest that runs from the original due date — not from when you found out.

Worth knowing: a CP2000 is not an audit and not a bill. It's a proposed adjustment, and it's frequently too high, because the IRS sees the income but not your losses or context. You have roughly 30 days to respond, and you can disagree with documentation. I've written up the one I received for 2023 — what the notice proposed, why most of the number was self-employment tax on winnings that were never a business, and where it landed.

So what do you actually do?

1. List every contest and sweepstakes site you played this year.All of them, including the ones you barely touched. You can't check a list you never wrote.
2. Know your annual reportable total on each one.This is the whole ballgame. On entry-fee contest sites that's your net for the year (winnings minus entry fees); on sweepstakes it's the gross value of what you won. Any site where that figure reaches $2,000 — in aggregate across the year, not per prize — will file a 1099-MISC. The IRS gets it, so you need it too.
3. For every site over the line, go find the form.Log into the account and check the tax-documents section. Electronic delivery is the default now, so assume the form exists in a portal rather than waiting on the mail.
4. If you cleared $2,000 and no form appears — ask for it.Contact the site's support and request your 1099. Don't shrug it off. If they filed one with the IRS, you want a copy in hand before you file, not a letter about it two years from now.

The transcript: a backstop, not a filing checklist

Your IRS Wage & Income Transcript lists every information return filed under your SSN — it's the same data the matching system uses. Pull it free at irs.gov/individuals/get-transcript, choose "Wage & Income," and compare it against what you reported.

But don't build your filing around it. Transcripts often aren't complete until late May — well after most people file. A clean transcript in February can simply mean the forms haven't posted yet. It's excellent for checking a prior year. It's unreliable as a pre-filing checklist, which is exactly why your own per-site records have to be the source of truth.

How BetTax Pro helps

The new rule turns tax season into a bookkeeping problem: you need a running annual total for every site you play, so you know which ones crossed $2,000 and therefore which forms exist. BetTax Pro tracks that automatically, flags the sites that should have generated a 1099, and reconciles them against the documents you actually received — so a missing form surfaces now, not in a letter two years out.

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