Quick Facts About Kickr Taxes
- Kickr doesn’t charge or deduct taxes directly from redemptions.
- Players are personally responsible for reporting redemptions to the IRS.
- The Federal tax rate is 24% of redeemed prize amounts.
- Additional state taxes apply and vary depending on your location.
- Tax reporting is required if yearly redemptions exceed $600.
- Kickr requires both phone and KYC verification before redemptions.
- IRS Form 1040 is needed to report redemptions.
- The legal age to play at Kickr and to pay taxes on redemptions is 21 years.
Overview of How Kickr Operates
Kickr is a social sportsbook that uses a dual-currency model: Bits (Gold Coin equivalent) for standard play and Bucks (Sweepstakes Coins equivalent) in promotional mode. Bits are used to play in fun mode, but they don’t have any redemption value. Bucks, on the other hand, can be redeemed for real prizes once the eligibility requirements and steps have been completed.
As we explained in our Kickr review, the sweepstakes site clearly specifies in its Terms and Conditions page that taxation responsibilities are entirely the player’s responsibility. This means that it’s your duty to report your sweepstakes “winnings" to the IRS, and not the site’s responsibility.
This distinction is very important because it highlights a key difference between Kickr and traditional sportsbooks. Traditional sportsbook operators issue W-2G forms when you’ve met the withdrawal thresholds. This indemnifies them. Kickr, however, doesn’t. They don’t need to report your taxes to the IRS, so they leave the filing process to you.
How Much Kickr Taxes Amount To
When redeeming prizes, there are two different tax obligations that you must meet: federal and state taxes.
- Federal level: The IRS applies a flat 24% tax withholding rate on wagering-related winnings in all US states. For example, if you redeem 1,000 eligible Bucks, that gives you a cash prize of $1,000. This means you have to pay a $240 tax on your redeemed prizes.
- State level: The rates often vary. In Iowa, it’s 6.75%, while Tennessee enforces a 20% rate. Some states have no additional gaming tax, but most apply their own percentage alongside federal requirements.
In practice, this means you need to look at both the federal and state levels together. For example, if you redeem $2,000 in Bucks in Iowa, the federal portion would be $480, while the state adds another $135 at 6.75%. That totals $615 owed in taxes. By contrast, in Tennessee, the same $2,000 redemption would result in $480 federal tax plus $400 state tax, totaling $880.
These examples highlight why location matters significantly when planning for Kickr tax obligations. Always confirm your local rules before filing, as some states have flat rates while others apply progressive scales.
Requirements for Reporting Kickr Taxes
Before filing your Kickr taxes, there are certain conditions that you must meet. Kickr requires account verification before redemptions can be processed, and the IRS requires reporting once totals exceed $600 annually. Here are the details for each:
| Requirement | Details |
|---|---|
| Phone verification | Completed after registration by entering a one-time code. Confirm your contact number. |
| KYC verification | Upload documents proving identity and address. Approval is usually within 24 hours. |
| Minimum reporting threshold | IRS requires reporting if redemptions total $600 or more in a calendar year. |
It’s also important to state that if you fail to complete either phone or KYC verification, your redemption requests will be delayed or denied. This doesn’t only affect your redemption amounts but also makes tax reporting impossible since you won’t have eligible winnings to declare.
These verification steps are very important from a compliance perspective. They help to ensure that Kickr meets anti-fraud and anti-money-laundering regulations.
For players, they serve as safeguards to make sure redemptions are tied to legitimate accounts. Skipping or delaying these requirements can therefore create complications both with receiving prizes and with filing accurate tax reports later in the year.
How to Report Kickr Taxes
Unlike traditional sportsbooks, Kickr does not issue W-2G forms. Reporting falls to the individual. Here’s how the entire process of reporting Kickr taxes works:
- Track redemptions: You need to track the entire prize amounts you’ve redeemed in Bucks. This gives you an idea of the amount you’ll have to pay in taxes.
- Obtain IRS Form 1040: To do this, you need to visit the official IRS website and download the form directly from there.
- Locate Schedule 1: Scroll to the section called “Other Income,” and find Line 8C.
- Enter details: Record the total amount of redemptions on Line 8C.
- Submit report: Attach Schedule 1 to Form 1040 and file it with your annual tax return.
When filling out Form 1040, Schedule 1 plays an important role. This is where all “Other Income”, including sweepstakes prizes, is declared.
For example, if you redeem $700 worth of Bucks across multiple small redemptions, you still need to total them up and report the full amount once you cross the $600 threshold.
Another example is joint filing. If you file jointly with a spouse, your Kickr redemptions are still reported under your Social Security Number. This means that even if your partner had no redemptions, the full amount attributed to your account must be reported under your name.
Tips for Handling Kickr Taxes
On some of the online forums we’re in, quite a number of people seemed confused about how to go about handling Kickr app taxes without getting penalized. To simplify reporting and avoid stiff penalties, we follow a few practical steps:
- Track redemptions consistently: This is the most important step. You don’t want to make the mistake of under-reporting your rewards. In order to do this effortlessly, you can monitor your redemptions directly from your profile page of the Kickr app on your mobile browser or the desktop site.
- Report accurately: You need to ensure that you report the exact totals of your redemptions to avoid discrepancies.
- Set aside funds: Depending on the state where you’re a resident, you need to reserve 24% or more with every redemption to cover tax obligations. Therefore, it’s important that you find out the exact tax obligations in your state, so that you know how best to file it.
- Keep documentation: Ensure you keep every documentation securely, including screenshots, statements, and confirmation emails. All of these can support your filings if you get audited.
Some players find it useful to use budgeting apps or simple spreadsheets to log each redemption as it happens. This prevents confusion at the end of the year. The IRS also offers an online withholding calculator, which helps estimate what you’ll owe and can prevent underpayment penalties.
Another practical step is setting up a separate savings account exclusively for tax funds. By moving 24% or more of each redemption into that account, you’ll always be prepared when tax season arrives.
Combining these proactive steps makes reporting smoother and minimizes the risk of penalties or unexpected liabilities.
Pros and Cons of Kickr Taxes
Like any system, reporting Kickr winnings has its advantages and drawbacks. We list the major ones below:
Pros
- No automatic deductions from Kickr
- Easy tracking of redemptions
- Clear terms and conditions
Cons
- Manual tax filing
Why Kickr’s Approach to Taxes Is Important
Understanding Kickr Taxes is essential because it shapes how you prepare your filings. Unlike some traditional sportsbooks that handle tax reporting for players, Kickr leaves it in your hands. This model gives you flexibility but also adds responsibility.
The IRS can impose a penalty of 5% per month on unpaid taxes. That’s why preparation, documentation, and early reporting are very important.
Legal Considerations and Player Eligibility
The site’s terms and conditions specify that you must meet the legal age to play at Kickr, which is 21 or older in most states. Additionally, only players residing in eligible US states can participate. Meeting these criteria ensures that redemptions, and by extension taxation, are valid under federal and state law. We give a detailed explanation of these legal requirements in our Kickr review.
Conclusion – Understanding Kickr Taxes Is Part of Playing Responsibly
From what we’ve seen, the whole process of filing Kickr taxes is straightforward once you understand your obligations. All you need to do is track your redemptions properly and report the accurate figures on Form 1040.
Kickr itself does not impose any charges, but you must report to the IRS if your redemptions reach $600 or more in a year. Federal and state rates are different, and they both apply to the total tax. The Federal tax is capped at 24%, while the rates for the different states apply.
If you’re ready to get started, click the banner on this page to sign up for Kickr, complete verification, and start playing on Kickr.
