Playing at a sweepstake sportsbook like Fliff gives you the chance to redeem real money prizes by placing social wagers on your favorite sports. However, just because playing is free, it doesn’t mean that you’re free from tax liabilities.
You’ll be required to pay Fliff taxes on any prizes you redeem on the site, including money and gift cards. The guidelines vary by state but my guide is a great place to start; I’ll cover frequently asked questions and give you information and tips on reporting taxes and budgeting your return.
Before I jump into more detail on Fliff taxes, let’s take a quick survey of Fliff’s positive features:
Sweepstakes casinos and sportsbooks are a new innovation in the US online gaming scene. Unlike real money gambling sites, social and sweeps sites, such as Fliff, don’t require users to stake real money to place social bets. Instead, players use two forms of virtual tokens called Fliff Coins and Sweepstakes Coins.
You won’t ever need to make a deposit and you won’t be able to withdraw winnings. Instead, you’ll be able to redeem any Sweepstakes Coins you win as prizes including real money, provided you’ve collected enough of it and met the playthrough requirements. Let’s take a closer look at how these two types of virtual currency operate:
As sweeps casinos and social sportsbooks don’t require players to lay down any real money, you might think that you won’t have to pay taxes on prize redemptions. But, under government regulations and, more importantly, those of the IRS, any prize redemptions you make will count as income. Therefore, prizes are considered taxable and should be included on your return.
Dealing with sweepstakes tax liabilities can be difficult so, to help you manage your Fliff taxes, I’ve assembled a collection of the most common queries you might come up against:
The amount of tax you pay on any Fliff prize redemptions depends on your overall income. In general, the rate of tax falls between 10% and 37% depending on where you live. Remember that your filing status, including whether you’re married or single, impacts your tax bracket and the amount you have to pay. Deductions and credits, such as child tax, education and retirement credits, can also lower your overall tax liability.
Although the IRS is a federal service, each individual region has its own specific guidelines regarding state income tax. For example, residents in some regions, including Nevada, South Dakota, Texas and Washington, do not pay state income tax. In other states, gambling winnings aren’t considered taxable income but sweepstakes prize redemptions might need to be included as part of your return. The best way to be clear on your individual liabilities is to check your state guidelines. Remember that filing your tax return after the April 15th deadline could incur interest or penalties.
It doesn’t matter if you redeemed your Sweepstakes Coins as real money or gift cards to Airbnb, Amazon or Chipotle, the IRS considers them as income. Therefore any gift cards you redeem also have to be included on your annual return.
The laws around gaming and taxes change frequently so it’s important to check the specifics with your state’s tax authorities before you submit your return. The Fliff sweepstakes site also has an FAQ section with some helpful information.
To report your prize redemptions, you’ll need to include the amount under the ‘Other income’ box on the tax form 1040, the standard form used to complete your tax return. If you’re unsure about how to include Fliff sweepstakes prizes on your file, the best bet is to consult a professional. Keeping accurate records of all of your prize redemptions will also make the process of completing your return much easier.
Top tip: It’s a great idea to set aside money for your tax bill throughout the year, including any prizes redeemed at Fliff. An average rate is 30% of every prize you redeem is a good place to start.
If your prize redemptions at Fliff go beyond a $600 threshold, you’ll be required to complete a 1099-MISC form. This is sent to you by Fliff at the end of the tax year. If, for some reason, it doesn’t arrive, you can contact the Fliff support team via email or the online contact form to request it. Remember that it’s a legal requirement to list all of your winnings when you file your taxes so the responsibility is on you to report these prize redemptions.
It's not possible to win real money at social sportsbooks, such as Fliff, but it is possible to redeem Sweepstakes Coins as real-world prizes, including money and gift cards. In many states, these prizes are considered taxable income and should be included on your annual return.
The situation around paying taxes on sweepstakes redemptions varies from state to state, but it’s important to make sure you’re enjoying Fliff’s social sportsbook responsibly by meeting your tax liabilities. Any prizes that you get by redeeming Sweepstakes Coins should be included in your tax return, including money and gift cards. Don’t forget that your liability may be higher if you redeem prizes worth $600 or more.
Fliff Review: If you're wondering whether Fliff is worth trying, it offers a unique approach to social sports betting with various promotions and rewards. While you won’t find a traditional match bonus, you can take advantage of daily login bonuses, daily challenges, and refer-a-friend offers to boost your balance of Fliff Coins and Sweepstakes Coins.
You can see more guides on playing at Fliff at PromoGuy.us, including a look at the different promotions available on the site.
You will have to treat any prize redemptions you make at Fliff as income for tax purposes and include it on your annual return. This includes real money prizes and gift cards.
Fliff is open to players aged 18 and over who are resident in any state except Washington. Plus, folks from Hawaii, Idaho, Louisiana, Nevada and Tennessee can access the site using Fliff Coins but won’t be able to redeem Sweepstakes Coins as real money prizes.
Simply put, taxes are payable on redemptions from Fliff because the US government considers them to be income. The amount you’re required to pay depends on the value of the prizes you’ve redeemed, your filing status, your overall income throughout the year and the particular regulations in your home state.
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