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Originally Posted by Bubba I know I get statements from my savings accounts for interest earned and it's under $600. I thought that there might be witholding or at least reporting to the IRS. |
I don't remember the full requirements as I tell my system to generate a 1099 on all non-employee compensation but as a one time "prize" under the witholding limit, the worse they would have to do is get a name, social, address and then file a 1099 at year end. It's the winner's responsibility to report it as income and technically make estimated tax payments but who's going to do that for $500?
Your savings tax statement and everyone elses is a compromise between the banks and the gov from when the gov wanted banks to take withholding from interest payments.