How will Ken Jennings be taxed on his Jeopardy winnings?
August 9, 2004
Date: Tue, 13 Jul 2004
Subject: Jeopardy winnings
Do you have any idea how Ken Jennings will be taxed on his winnings on Jeopardy? Will there be a 1099? Will taxes be withheld? What is the procedure?
Date: Fri, Jul 30, 2004
Ken Jennings is a resident of Utah. The Jeopardy show is taped in California. The prize will be reported on Form 1099-Misc. There is no provision for federal tax withholding for game show winnings. California will tax the winnings as California-source income. Ken Jennings can claim a state tax credit for the California tax to eliminate his Utah tax. California will withhold 7% of the winnings when they are paid, unless the Franchise Tax Board consents to a lower rate or no withholding in writing after a request by the payor or payee. I estimate that if Ken Jennings prepays his California tax, the net tax rate on the winnings will be about 43.5%.
For answers to new questions, subscribe to our newsletter, Michael Gray, CPA's Tax & Business Insight by filling out the form below.
Home Newsletter Archive Introducing Michael Gray, CPA Articles Tax FAQ Need Help? Other Links