Guide: Prize Payout FAQs

**PLEASE NOTE: HeroX is not a certified tax attorney, advisor, or accountant. The information below is simply a guide so winners can get an idea of what to expect after winning a challenge. Please consult a licensed professional with any questions specific to your situation**

Congratulations! You’ve been selected as a winner. Now what? I bet you’re wondering how you will receive your prize along with many other questions. To help bring some clarity to a (likely) new situation, we created this FAQ so you have an idea of what happens next.

Q: How will I receive my prize money?

A: HeroX distributes prize money through wire transfer or ACH (automated clearing house). If HeroX is not paying out your prize, the sponsor may elect to distribute the funds through the same methods or different ones, such as physical check.

Q: What information does HeroX or the sponsor need to send my prize money?

A: HeroX requires your general contact information (name, address, phone number), banking details, and the appropriate tax form (our 3rd party vendor, Tipalti, will help you decide which tax form applies to your situation).

Q: How will I securely provide my payee details?

A: If HeroX is paying your prize, we utilize a 3rd party vendor, Tipalti, to collect your details. You can read about Tipalti’s security certifications and compliances here. If the sponsor is paying your prize, they probably won’t use Tipalti but may use another service or email. If using email, make sure to add encryption for another layer of security. If you ever have a question about a sponsor’s legitimacy, you can contact HeroX at solve@herox.com

Q: How long will it take to receive my prize?

A: HeroX aims to payout all prizes within 30 days of the winners being announced. If the sponsor is paying your prize, we hold them to the same standard, but please be aware it may take them a bit longer.

Q: Is the prize money taxable?

A: This is the information HeroX has been able to compile regarding tax withholdings on prize money:

  • U.S. Citizens: No tax withholding on prize winners in the US. When the individual files personal income taxes, the prize money will show up on a 1099-Misc if over $600.00, and will be filed with the return. Prize money of $50.00 or more is self-reported on 1040 line 21. A W-9 form must be filled out by the winner and on file with the company awarding the prize. This form provides all of the information for sending a 1099-Misc to awardees with prizes exceeding $600.00. In the event that an employee of the sponsoring organization is the winner, the prize(s) will need to be reported on the employee's W-2.
  • Non-U.S. citizen: when the prize is awarded to a non-U.S. citizen, there is a two step process that must be followed. First, 30% of the prize must be withheld for taxes. Second, the organization must fill out the IRS Form 1042, reporting U.S. Source of Income by Foreign Persons. The IRS Form W-8BEN is filed by the Foreign national prize winner to report the amount received and the 30% withholding in the prize money. Note that if your country has a tax treaty, then this will reduce the withholding percentage. This percentage will then be used to deduct in accordance with the tax form submitted.