I have just recently won $500 dollars cash prize at a contest at my work. My work taxed the cash prize…. I thought that the taxes start at $1000. Could someone clear up the Tax Rules on Cash Prizes less than $1000 in Pennsylvania?
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12. February 2010 at 10:50 pm
Legally you pay on a $1 prize.
In PA, if it’s a win from the state lottery, you don’t pay state income tax, otherwise you do.
So the $500 is taxable for both federal and state.
12. February 2010 at 10:50 pm
In the usa in the here and now the rule is everything is taxed from the first dollar to the funeral.
12. February 2010 at 10:50 pm
$1
If it is through work, any amount should show up in your W2 and be taxed as ordinary income.