The 2026 FIFA World Cup runs from June 11 to July 19, 2026, and FIFA has confirmed U.S. host cities such as Dallas, Houston, Los Angeles, Miami, and New York/New Jersey. During a trip like that, fans often enter sponsor sweepstakes, fan giveaways, and lottery-style promotions. If you win, the IRS usually treats that prize as taxable income.
That can surprise international visitors. However, the rule is simple: if the prize comes from a U.S. source, the tax bill may follow. Therefore, if you are a nonresident alien, foreign tourist, or foreign business owner, you should understand the withholding rules before you cash out.
What Counts as a Taxable Prize?
The IRS says most income is taxable unless a law specifically says otherwise. That includes prizes and awards. In addition, the IRS treats gambling income broadly, and that list includes lotteries, raffles, sports betting, and casino wins.
That means a cash prize is not the only taxable prize. A car, a trip, a hotel package, or other noncash reward can also count. The IRS says you must include the fair market value of noncash prizes in income.
- Cash prize: taxable at its full value.
- Car or trip: taxable at fair market value.
- Lottery or sweepstakes win: usually taxable income.
- Promotional giveaway: often taxable unless a narrow exception applies.
Therefore, do not assume a “free” prize is tax-free. If you can receive it, the IRS may also want a report of it.
How the Tax Works for Nonresident Aliens
If you are a nonresident alien, the United States generally taxes your U.S.-source income at a flat 30% rate unless a treaty or special rule applies. The IRS calls this NRA withholding. It also says that many types of U.S.-source income paid to foreign persons are subject to this rule.
For prize money and many gambling-type winnings, the payer may need to withhold tax before paying you. The IRS says nonresident alien prize money is reported on Form 1042-S, not Form 1099-MISC, and the related withholding return is Form 1042.
What Withholding Looks Like in Practice
Imagine you win a World Cup promotional prize in Miami or Dallas. The sportsbook, casino, sponsor, or promoter may hold back part of the payment before giving you the rest. That withheld amount goes to the IRS, and you should receive a Form 1042-S showing the income and tax withheld.
That form matters. It gives you proof of the U.S. tax already taken out. Furthermore, even if the payer later decides a treaty or exemption applies and withholds nothing, the IRS still says Form 1042-S can be required for reporting.
Why Form 1042-S Matters So Much
Form 1042-S is the foreign-person reporting form. It shows the amount paid and the amount withheld. The IRS also says withholding agents must generally file Form 1042-S for amounts paid to foreign persons that are subject to NRA withholding, even if no tax was actually withheld because a treaty or code exception applied.
That is why you should never throw the form away. Keep it with your passport copy, prize paperwork, and travel receipts. If you later need to claim a refund or prove treaty eligibility, that document will be important.
Can a Tax Treaty Reduce the Tax?
Yes, sometimes. The IRS says a U.S. income tax treaty can reduce the rate of withholding or eliminate it for some types of income, depending on the treaty and the income category. However, the exact rule depends on how the prize is classified and whether you qualify as a resident of the treaty country.
For certain winnings, the IRS even says some treaty-country residents may be exempt from U.S. tax. But treaty benefits are not automatic. Therefore, you should check the treaty tables and provide the correct documentation to the payer before payment.
Why Form W-8BEN Matters
Form W-8BEN is the main document many foreign individuals use to certify foreign status and, when eligible, claim treaty benefits. The IRS says you may need to give it to the withholding agent to claim a reduced rate or exemption under a tax treaty. In addition, the IRS says a recipient TIN is generally required to reduce withholding below 30% in many cases.
In simple terms, no W-8BEN can mean more tax withheld. Therefore, if you think a treaty applies, handle the paperwork early. Do not wait until after the prize is paid.
What Happens If You Still Owe Tax Later?
If withholding did not fully satisfy your U.S. tax, or if you want to claim a refund of excess withholding, the IRS says a nonresident alien may need to file Form 1040-NR. The IRS also says nonresident aliens must file if they have U.S. income on which the tax was not fully satisfied by withholding.
That matters for foreign winners who receive a large prize or who want to correct withholding. Therefore, keep every piece of paperwork. It can help you decide whether a filing is needed later.
Forms You May Hear About During Your Trip
- Form W-8BEN: used by foreign individuals to certify foreign status and, if eligible, claim treaty benefits.
- Form 1042-S: used to report prize income and withholding to foreign persons.
- Form 1042: filed by the withholding agent to report tax withheld on U.S.-source income paid to foreign persons.
- Form 1040-NR: used by nonresident aliens to report U.S. income or claim a refund of excess withholding.
- Form 8840: used for the closer connection exception to the substantial presence test. This does not lower prize tax by itself, but it can matter for longer stays.
- FinCEN Form 105: required if you physically carry, mail, or ship more than $10,000 in currency or monetary instruments into or out of the United States.
Smart Steps Before You Claim a Prize
Prize winners can avoid a lot of trouble with a few simple habits. Furthermore, these steps help both tourists and foreign business owners.
- Ask how the prize will be reported. Some prizes go on Form 1042-S.
- Bring your passport and tax ID documents. The payer may need them for withholding records.
- Keep the prize paperwork. Save your W-8BEN, 1042-S, and any payout confirmations.
- Check treaty status early. A treaty can change the outcome, but only if you qualify.
- Watch your cash. If you leave with a large cash prize, currency reporting rules may apply.
For World Cup visitors, this is especially important in big host cities. A contest win in Miami, New York/New Jersey, Los Angeles, or Dallas can create the same tax issue as a casino payout. Therefore, do not assume the prize is free money.
Frequently Asked Questions
Are sweepstakes prizes taxable for foreign tourists?
Yes, in most cases. The IRS says prizes and awards are taxable unless a specific exception applies, and nonresident aliens are generally subject to U.S. withholding on U.S.-source income.
Will I get Form 1042-S if I win a prize in the U.S.?
Usually yes, if the prize is paid to a foreign person and is subject to NRA withholding or reporting. The IRS says withholding agents must generally file Form 1042-S for amounts reported under these rules.
Can my home-country tax treaty lower the tax?
Sometimes yes. The IRS says treaties can reduce or eliminate withholding for some income categories, but the result depends on your residency status and the treaty itself. You may need Form W-8BEN and a tax ID number to claim the benefit.
What if I win a car, trip, or other noncash prize?
That can still be taxable. The IRS says noncash prizes are included in income at their fair market value, so a trip or car can create a tax bill too.
Final Takeaway
If you win a World Cup sweepstakes or lottery prize in the United States, do not assume it is tax-free. The IRS often treats the prize as taxable income, and foreign winners may face withholding and Form 1042-S reporting. However, a treaty may reduce the tax if you qualify and file the right forms on time.
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Disclaimer: This article is strictly for educational and informational purposes only. This website does not provide tax or legal services. Readers should consult a certified CPA or tax professional for their specific situations.
