A Note About Payouts From PAPA

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I wanted to take a moment to clear up any confusion there may be regarding payouts from the Replay Foundation for competitions we run. As a non-profit, we have tighter restrictions on how we account for our money. The biggest one, a pain for both you and me, is the W9 tax form.

If we give you $600 or more in a calendar year, for anything - winnings, work performed, for the purchase of a game, etc. - we have to report it to the IRS. To receive these payouts, you have to fill out a tax form. At the end of the year, the W9s of the +$600 crowd go to the accountants, while those of the -$600 crowd go to the shredder.

We do not, and we will not, keep your W9 any longer than we have to.

For your part, as a player, you have to fill out a W9 at every event of ours you win money at.

This not only saves me some time, allowing payments to go out faster, but it protects you. This is how I can tell that the John Doe who played in PAPA 19 is NOT the same John Doe that played in Pinburgh. This is how John Doe 1 doesn’t end up with a tax bill higher than he ought. If you don’t think this is a possibility, I would have you ask Josh Sharp how often he has to adjust a ranking in IFPA because two names are similar, or how often I’ve had to rewrite a check because someone didn’t give their legal name, or how many complaints we received that Dan Burfield was allowed to play in D division this year - totally different Dan Burfield, completely unrelated to each other.

So, if you won money at PAPA 19 and have not received your payout, you need to fill out a W9 and send it to me.

If you win any money in any competition at ReplayFX, you have to fill out a W9. Even if you did it for PAPA 19.

You will have to do it again at PAPA 20.

Happy flipping!

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Thank you for running a tight ship!

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Also a note for those in the USA, as ages and experience vary here:

If you win money at papa, or technically anywhere else in pinball for that matter, you should be reporting it on your taxes. However, don’t stress that you will have to pay too much, or anything extra in tax liability. You can write off expenses you incurred in earning your winnings against any prize money up to but not over the amount of all your pinball winnings for the year.

This can reasonably include flights, hotels, rental cars, entry fees - your expenses for competing to try and earn that money. This can be easily done in turbotax for example.*
These things have easily covered any winnings I’ve had since PAPA started sending out 1099’s.

*I’m not your accountant, take my advice with a grain of salt.

/pinballdoesntpay

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Also, we can do direct deposit to your bank now. This can be especially useful for our non-US visitors. Come prepared with your bank info. Again, every time - I shred that as soon as the payment has properly gone through.

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For those daring few that have earned some significant winnings in a year, you can also technically declare your pinball hobby a profession and take negative losses; however, in doing so you also are required to show a net profit within 3 years or else the IRS deems your ‘profession’ a hobby and you cannot take a loss. Then you can only write off your winnings to a net zero, as Cayle pointed out.

I say daring few, because in my opinion, this also invites a higher chance of an audit, and that’s not worth it. If you win some big money though, say you win Replay and/or PAPA, then over the years that person might actually make a profit once in a while and can truly be a professional in the eyes of the IRS. I would think only top 10-20 players in the world could pull that off. Also - check the tax code - things like this change and I could be wrong on the 3 year requirement as the IRS rules are always changing.

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I’d like to just highlight that if you end up in this situation, and you have ideas about what you can/cannot deduct or how to offset your tax burden from winnings, please contact a tax professional. I kind of want to put a cap on this discussion right here, because this isn’t a tax advice forum and it really shouldn’t be. The reminders from @chesh were for information purposes, I think the rest belongs elsewhere.

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