We need advice on the best way to distribute gifts/awards for a contest we are going to have amongst our insurance agencies. The agency that produces the most in a given amount of time will win. The prizes (weekend getaway trips) will be given to the individual employees of the agency and not the agency as a whole. We have several ideas we are kicking around about how to pay out these gift/awards. 1) make a deposit with a local travel agency, winners would make their arrangements directly with the travel agency who would then bill us any amounts above our deposit. 2) Give out gift certificates for the travel agency. 3) Issues checks directly to the winners.

So am I correct in that we would be required to issue 1099's (if the $ is above $600 of course) to the recipients of the gift/awards? But also would the way we distribute the gift/award determine who we would have to issue the 1099 to? The winner or the travel agency (if we paid them direct) or would they just be a third party that we pay on behalf of gift/award winner? I would appreciate any direction on this as I want to ensure that we handle it properly to avoid issues down the road.