As we all know, social betting app Rebet is powered entirely by virtual coins. However, some can be redeemed for cash prizes in the real world, which often leaves players wondering, “do Rebet taxes apply here?”
Well, that’s a yes, I’m afraid – though how it works is simpler than you might think. Basically, all Americans who redeem Rebet Cash for IRL prizes of $600 or more in a year must report this to the IRS, and pay federal taxes of 24%. While for some, state taxes may also apply. Here’s what you need to know.
Rebet is a social betting app. And those of you who’ve read my Rebet review, or played there before, will know it’s one of the best examples of such apps anywhere in the US right now.
If you’re not massively familiar with how it works, Rebet is inspired by conventional betting sites and online sportsbooks, except users like you and I must use virtual coins known as Rebet Coins and Rebet Cash to make our picks. And the two are very different from one another.
Rebet Coins exist for entertainment purposes only, so there’s nothing to worry about in terms of Rebet taxes if you’re making your predictions entirely using these just for fun coins on the site.
But with Rebet Cash – a sweepstakes inspired currency that can be redeemed for actual cash prizes in the real world – it’s a different story.
Put simply, any Rebet Cash you win from social betting on the site can be redeemed for cash prizes at a rate of 1 Rebet Cash = $1 USD once it’s been played through at least 1x, and once you’ve accumulated 20 Rebet Cash or more.
From there, taxes will apply once you’ve redeemed $600 or more worth of Rebet Cash prizes in any one financial year. By which I mean:
I did a bit of digging through Rebet’s T&Cs and found that no – Rebet won’t “charge” or deduct taxes from your account when you request prize redemptions exceeding the $600 threshold.
Rebet’s redemption rules make it pretty clear that the onus is on you to report your Rebet Cash prizes to the IRS yourself.
So, how does this work? Well, let’s take a look in the next section.
As we’ve seen, yes, you do – but only if you’ve been placing social wagers using Rebet Cash and have redeemed $600 worth of prizes or more in a year.
If this sounds like you, here’s how to handle your reporting, one step at a time:
First, at the end of the financial year, you’ll need to tot up how much you’ve redeemed in Rebet Cash prizes, if said amount has exceeded $600.
Second, you’ll need to get your hands on Form 1040 from the IRS. This can be easily downloaded from their website.
Next, start filling out the above form alongside your regular IRS return. Your Rebet Cash prizes will need to be reported as “Other Income” on Form 1040, which can be found under Line 8c in Schedule 1.
Once you’ve located Line 8c in Schedule 1, you simply need to punch in the total amount of Rebet Cash prizes you’ve redeemed over the course of the financial year (in USD, of course).
Finally, you’ll need to check over the amount and details once more, then submit your Form 1040, Schedule 1 and regular return to the IRS. And that’s that – your Rebet taxes are done and dusted. Until the next financial year, of course.
If you live in a part of the US where state income taxes apply, you’ll also need to handle these, too. Here’s how tax rates compare:
So, while federal taxes are charged at 24% as standard, state tax rates are gonna vary depending on where you’re based, basically. Ordinarily, state taxes will range from 2 to 13%, but I’d advise double checking with your local tax authority for a full rundown of what’s what where you live.
So, you’ll need to pay taxes on any Rebet Cash prize redemptions you make for cash prizes in the real world – and the onus is on you to report said prizes to the IRS.
That said, this only applies if you redeem more than $600 worth of prizes in any one financial year. What’s more, placing social wagers exclusively in just for fun mode using Rebet Coins, which aren’t prize redeemable, won’t see you liable for any taxes at all.
No matter which mode you choose to bet in, Rebet is an absolute blast, offering competitive odds across a ton of social sportsbook markets, unique peer to peer plays where you can challenge your friends over their predictions directly, and some awesome bonuses along the way.
To register and play with Rebet today, all you need to do is follow one of my Rebet banner links on this page, then enter your details from an eligible state. Just keep in mind that you will need to think a bit about taxes if betting in Rebet Cash mode, yeah?
Yes. If you’re using Rebet Cash, any cash prize redemptions you request will be taxable if they exceed $600. If you’re playing using just for fun Rebet Coins, mind, you won’t need to worry about taxes at all – as Rebet Coins aren’t prize redeemable.
Yep. Regardless of which sweepstakes apps or website you're using, any SC cash prize redemptions you make will be liable for federal taxes in the US – and potentially state taxes, too, depending on where you live. At a federal level, the same $600 threshold per calendar year applies.
In most states, you’ll only be permitted to redeem up to a maximum of 1,000 Rebet Cash daily, and might also be charged a $0.75 processing fee for each prize redemption.
At a federal level, a failure to report your Rebet Cash prize redemptions above the $600 limit to the IRS by April 15 each year may result in “Failure to Pay” penalties. So, be careful with this.
Supporting documents aren’t always mandatory, but are always sensible to have. So, consider attaching the likes of screenshots from your Rebet app or account page. And always consider appointing a tax expert if you feel like you need a helping hand.
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