Do You Pay Taxes on Sweepstakes Winnings?
Sweepstakes casino redemptions are taxed as ordinary income, reported as other income on Schedule 1 of Form 1040, whether or not you get a form. From tax year 2026, operators send a Form 1099-MISC once your redemptions reach $2,000 in a year, up from $600. Gold Coin purchases aren't deductible.
Key facts
- Sweepstakes redemptions are taxable income, reported as other income on Schedule 1 of Form 1040 (Sweepsy).
- From tax year 2026, the Form 1099-MISC threshold rose from $600 to $2,000 under the One Big Beautiful Bill Act (RSM, January 2026).
- The W-2G threshold for gambling winnings also moved to $2,000 for 2026, indexed for inflation after 2025.
- From 2026, gambling loss deductions are capped at 90% of losses, up to winnings.
- No form doesn't mean no tax: the threshold only decides when the operator must report.
Nobody likes this topic, but it's cheaper to get it right in February than to fix it later. Short version: prizes you redeem from sweepstakes casinos are taxable income, and the reporting rules changed for 2026. This guide covers the federal basics. It isn't tax advice, so talk to a tax professional about your own situation.
Are sweepstakes winnings taxable?
Yes. When you redeem Sweeps Coins for cash or a gift card, that prize counts as income. Tax guides for sweepstakes players, such as Sweepsy's, put it on your federal return as other income, on Schedule 1 of Form 1040.
It doesn't matter whether the operator sends you a form. The form only decides whether the IRS hears about it from the operator too.
What changed in 2026
The One Big Beautiful Bill Act raised several reporting thresholds starting with tax year 2026 (RSM, January 2026):
| Form | Used for | Before 2026 | From 2026 |
|---|---|---|---|
| 1099-MISC | Prizes and awards, including sweepstakes redemptions | $600 | $2,000 |
| W-2G | Certain gambling winnings (real-money casinos) | $1,200–$1,500 by game | $2,000 |
After 2025, these minimums are adjusted for inflation each year. So from 2026, a sweepstakes operator generally sends a 1099-MISC once your redemptions reach $2,000 in the calendar year. Under that amount you may not get a form, and the income is still taxable.
The same law also limits gambling loss deductions to 90% of losses, up to your winnings, starting in 2026. RSM's example: win $100,000, lose $100,000, and you can deduct only $90,000.
What counts and what doesn't
Tax guides for sweepstakes players say the taxable amount is your total redemptions, and that Gold Coin purchases can't be deducted as losses. In other words, spending $200 on packages and redeeming $150 doesn't create a $50 loss you can write off. Keep that in mind if you buy packages regularly.
State income tax rules vary, and some states treat these prizes differently, so check your state too.
What about rewards from sites like ReloadRush?
ReloadRush isn't a sweepstakes casino. It pays crypto rewards for completing advertiser offers. Its terms say you're responsible for any taxes on rewards you receive, so treat them as income you may need to report. Crypto adds its own wrinkle: if the coin's value changes between receiving and spending it, that can matter too. A tax professional can tell you how to handle both.
Keep it simple
- Log each redemption and each crypto reward as it happens.
- Keep any 1099-MISC forms that arrive, usually by early February.
- Report the income even when no form arrives.
- Ask a tax professional if your totals are growing or you also play real-money casinos.
Want a number? The sweepstakes tax calculator estimates what to set aside from your own redemptions. The redemption log keeps the running totals.
Related: Gold Coins vs Sweeps Coins explains redemptions, and Where Are Sweepstakes Casinos Legal? covers the states where they operate.
Where ReloadRush fits
ReloadRush is a free rewards site: no deposit, no card, crypto cash-outs (LTC or USDT) from $5 for free game, app and survey offers. It doesn't sell coins or offer gambling. Sign up free or read the FAQ.
Frequently asked questions
Do I have to pay taxes on sweepstakes casino winnings?
Yes. Redeemed prizes are taxable income. The 1099-MISC threshold only decides whether the operator sends you and the IRS a form, not whether the income is taxable.
What is the 1099-MISC threshold for 2026?
$2,000, up from $600, starting with tax year 2026 under the One Big Beautiful Bill Act.
Can I deduct what I spent on Gold Coins?
Generally no. Tax guides for sweepstakes players note that Gold Coin purchases can't be deducted as losses.
Are ReloadRush rewards taxable?
Treat them as income you may need to report. ReloadRush's terms say you're responsible for any taxes on the rewards you receive. A tax professional can tell you how to report them.
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- Big Beautiful Bill brings big tax reporting changes for casino industry, RSM US (2026-01-05)
- How Sweepstakes Casino Winnings are Taxed, Sweepsy (updated 2025-12-31)
- Terms of Service, ReloadRush (effective 2026-09-22)
18+ only. ReloadRush is a free rewards site, not a casino: we do not offer gambling and do not sell coins or game credits. Not affiliated with any sweepstakes, social or online casino operator. Rules and state laws change, so check the operator's terms before you play.