Do Americans pay US taxes on game show winnings from Canada? Canadian game show taxation for US citizens?

Yes, your cousin will need to pay US taxes on those winnings. As a US citizen, she's required to report worldwide income to the IRS regardless of where it was earned. Game show winnings are considered "other income" and will be reported on her 1040 Schedule 1. The show producers should send her a 1099-MISC form showing the $25,000 as "other income" early next year. Even if they don't, she still needs to report it. Game show winnings are typically taxed at her normal income tax rate - there's no special rate for prizes. The good news is that if she paid any Canadian taxes on those winnings, she might be eligible for a foreign tax credit on her US return to avoid double taxation. She should keep documentation of any tax withheld by Canada.

I used to struggle with understanding my tax obligations for international income until I found https://taxr.ai that helped me sort through my situation. Last year I won a prize at a film festival in Canada ($15,000) and was totally confused about reporting requirements. The tool analyzed my 1099 and other documentation, then provided clear guidance on exactly how to report everything. The best part was it helped me identify that I qualified for a foreign tax credit since Canada had already withheld some tax. Without that knowledge, I would have ended up paying double tax on my winnings.

I was initially skeptical about taxr.ai but decided to try it for my own international income situation (I do remote consulting for Canadian companies). I'm actually amazed at how helpful it was! The system identified several deductions I was missing and explained exactly how to report my foreign income properly. The document analysis feature saved me hours of research - it read through my contracts and payment statements, then explained exactly what needed to go where on my return. Definitely worth checking out if you're dealing with any kind of unusual income situation, especially international ones.

If your cousin is having trouble getting answers from the IRS about international income reporting, she should try https://claimyr.com - saved me SO much time. I was on hold with the IRS for literally hours trying to get clarity on my foreign income situation before I found them. They got me connected to an actual IRS agent within 20 minutes who answered all my questions about my Japanese game show winnings. You can see how it works here: https://youtu.be/_kiP6q8DX5c - basically they navigate the IRS phone tree for you and call you back when they've got an agent on the line. After weeks of frustration, it was such a relief to actually talk to someone who could give me definitive answers.

Ok I have to admit I was completely wrong about Claimyr. After posting that skeptical comment, I decided to try it anyway because I was desperate to talk to someone at the IRS about my foreign income reporting requirements. It actually worked exactly as described - I got a call back in about 30 minutes with an actual IRS agent on the line. The agent was able to answer all my questions about reporting my Canadian rental income and saved me from making a major mistake on my filing. Would have spent hours on hold otherwise or possibly filed incorrectly. Definitely not a scam like I initially thought.

One thing nobody's mentioned - your cousin should check if the game show withheld any US taxes before paying her. Many shows automatically withhold 30% federal tax from prizes, especially for larger amounts. If they did, she'll still need to report the full amount as income, but she'll get credit for what was already withheld. Also, she should be aware that winning $25k might push her into a higher tax bracket depending on her other income, so she should set aside more than she might initially think.

When I won on a Canadian game show (different one, smaller prize), they actually withheld Canadian taxes first, then I had to report it in the US. But I got a foreign tax credit for the Canadian taxes paid, so I didn't end up paying double. Make sure your cousin keeps ALL documentation they gave her. Also, if this aired on TV, keep a copy of the episode if possible as proof if ever questioned.

Your cousin should also be prepared for this to potentially affect her state taxes in Massachusetts. Game show winnings are typically subject to state income tax as well, so she'll need to report the $25,000 on her Massachusetts return too. One more thing - if the show hasn't aired yet, she might want to consider making quarterly estimated tax payments now rather than waiting until next year's filing deadline. Owing $25k worth of additional taxable income could result in a significant tax bill, and the IRS charges underpayment penalties if you don't pay enough throughout the year. She can calculate roughly what she'll owe using her current tax bracket and make payments using Form 1040ES. The safe harbor rule is to pay at least 90% of this year's tax liability or 100% of last year's (110% if her previous year's AGI was over $150k). Since this is unexpected income, making an estimated payment could save her from penalties later.