If you participate in Splash-managed contests or use the Marketplace to buy or sell entries, you may have questions about how these transactions are treated for tax reporting.
This article explains how Splash calculates your Net Winnings and when you may receive a tax form.
How are my Net Winnings calculated?
Splash calculates your Net Winnings over the course of each calendar year.
Your Net Winnings are determined by subtracting your qualifying real-money debits from your qualifying real-money credits.
Transactions that increase your Net Winnings
The following count as real-money credits:
Contest payouts
Proceeds from selling an entry through the Marketplace
Other qualifying real-money credits to your account
Transactions that decrease your Net Winnings
The following count as real-money debits:
Contest entry fees
Purchases of Marketplace entries
Other qualifying real-money debits from your account
When will I receive a tax form?
Splash classifies contest winnings as Miscellaneous Income for federal tax reporting purposes.
If your Net Winnings exceed $600 during a calendar year, Splash will issue you a Form 1099-MISC in accordance with applicable federal reporting requirements.
If your Net Winnings do not exceed the reporting threshold, you will not receive a Form 1099-MISC from Splash.
Please note that you are responsible for complying with all applicable tax laws, regardless of whether you receive a tax form.
How does the Marketplace affect my Net Winnings?
Marketplace activity is included when calculating your Net Winnings.
Selling an entry
When you sell an entry through the Marketplace, the sale proceeds count as a real-money credit and increase your Net Winnings.
Buying an entry
When you purchase an entry through the Marketplace, the purchase price counts as a real-money debit and reduces your Net Winnings.
Winning with a Marketplace entry
If you purchase an entry through the Marketplace and that entry later wins a prize, the contest payout counts as a real-money credit and increases your Net Winnings.
Frequently Asked Questions
Does selling an entry count toward tax reporting?
Yes. Proceeds from Marketplace sales are included when calculating your Net Winnings.
If I buy an entry and it later wins, is the prize included?
Yes. The purchase price reduces your Net Winnings, while any winnings from that entry increase your Net Winnings.
Do entry fees reduce my Net Winnings?
Yes. Qualifying contest entry fees and Marketplace purchases are treated as real-money debits and reduce your Net Winnings.
Does this apply in every state?
Federal tax reporting requirements are generally the same for eligible U.S. players. If your Net Winnings exceed the applicable federal reporting threshold, Splash will issue the appropriate tax form.
State tax laws may differ. If you have questions about your individual tax situation, we recommend consulting a qualified tax professional.
Does Splash provide tax advice?
No. Splash provides tax reporting when required but cannot provide tax advice. If you have questions about your personal tax obligations, please consult a qualified tax professional.