[quote name='tnote827']Ok guys, ANYTHING you win is income. As a CPA, I can promise you that anything you get as a prize to a contest is suppose to be reported as income on your income tax return. Just like we are suppose to be paying use tax on all of the games, systems and TVs we buy from amazon to our municipality. Do people actually do this? Not usually. Does that make it legal? Nope.
And you only pay tax on it at your marginal rate, which I imagine for most high school and college students would be under 20%, if you even are required to file a tax return at all. Since the standard deduction is over $5,000, you need to have at least that much income before you have to pay federal tax. You have a filing obligation for a return, but normally it is only to report no tax due.[/quote]
Please re-read this, as it's a well put summary of the law. And to clarify one more point explained above... there is no cut off for what you have to report. The cut off people are thinking of may be for the people supplying the prize - they may have to collect tax information and file a 1099 (to tell the IRS that they gave you money and make sure you report it) before giving you the prize. As tnote827 noted you're not excused from your reporting obligation regardless of the amount.