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University Department Wants to Hold Competition: How do We Report Winnings?

Question

We have a department at our university who wants to hold a competition, in which there will be an entry fee, and have a committee select the winners who will receive cash prizes/awards and one winner will receive a sewing machine.  Is this reportable on Box 3 of the 1099-MISC or should it be awarded on the 1098-T?  Does the entry fee make any difference in this scenario?

Answer

This is how you handle such situations.

Please note that prizes for non-employees based on services provided are...

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