Things to Know:
Prizes and Awards – 4866:
- Per IRS guidelines, “prizes” and “awards” that are not for the purpose of aiding the student’s study, training, or research are not considered scholarships or fellowships. Examples include a prize paid for winning a piano competition or a prize paid for winning some sort of contest.
- Prizes which are includible in gross income include amounts received from radio and television giveaway shows, door prizes and contests of all types. Cash scholarship prizes won in a contest are not considered scholarships if the student is not required to use the disbursement for educational purposes. Note: A scholarship prize that can only be used when enrolled as a degree candidate at an educational institution is a qualified scholarship (IRS Publication 970). Example: A competition is held and prizes for 1st, 2nd, and 3rd places are awarded to students.
- If considered a prize, process through the DV process. Note: Documentation on how the prize contest was conducted should be entered into the DV notes section. IU reports such payments for tax purposes on Form 1099-MISC. Contact Rozzie Gerstman at email@example.com or 855-1123 with questions.
Note: Per federal financial aid regulations, cash-based ‘prize’ scholarships (including gift cards) awarded to Bloomington students are considered scholarships, and the value of these scholarships should be entered into the SIS. The value of educational equipment (e.g. iPads) awarded to Bloomington students should also be accounted for in the SIS. Contact the Bloomington Office of Student Financial Assistance at firstname.lastname@example.org with processing questions.