How Much Do Big Brother Winners Get After Taxes?

When a contestant triumphs on a reality television show like Big Brother, securing a substantial cash prize, public curiosity often shifts to the actual amount the winner pockets. The publicized grand prize represents only the gross amount. Winnings are subject to various taxes, significantly reducing the final take-home sum. Understanding tax implications is crucial for anyone considering the financial reality behind such a major win.

Understanding the Gross Prize

The Big Brother competition offers a financial reward to its victor. For recent seasons, the grand prize has been $750,000. This sum is the starting point for calculations. This entire amount is considered taxable income by the Internal Revenue Service (IRS).

Federal Tax Treatment

Prize money from reality television, like Big Brother, is classified by the IRS as ordinary income. It is taxed similarly to wages or salaries. Income is subject to progressive federal income tax rates, with different portions taxed at increasing percentages. Large winnings can elevate an individual’s total income, potentially pushing a portion into the highest federal income tax bracket, which can be as high as 37%.

Upon winning, a mandatory federal tax withholding is applied to large prizes. For winnings exceeding $5,000, the IRS requires a 24% upfront withholding. While this percentage is withheld directly from the prize, it serves as an estimated payment towards the total federal tax liability. The final tax owed is determined when the winner files their annual income tax return. The show’s producers report winnings over $600 to the IRS using Form 1099-MISC.

State and Local Tax Variables

Beyond federal obligations, state and, in some cases, local income taxes influence the winner’s take-home amount. State income tax rates depend on the winner’s state of residency. States vary significantly in how they tax such winnings.

Several states, including Florida, Texas, Washington, South Dakota, Tennessee, Wyoming, and New Hampshire, do not impose a statewide income tax. A winner residing in these states would only be subject to federal taxes. Other states have their own income tax rates, some substantial, like New York, where rates can reach 10.9%. Less common, some municipalities or cities may also levy local income taxes.

Calculating the Final Take-Home Amount

Combining federal and state tax considerations reveals how significantly the initial $750,000 Big Brother prize is reduced. For instance, a winner claiming the $750,000 prize faces an immediate 24% federal withholding, amounting to $180,000.

However, since the prize pushes the winner into a high tax bracket, their effective federal tax rate could be closer to 37% or more, depending on other income and deductions. This means a federal tax liability of approximately $277,500 ($750,000 x 37%). Since only $180,000 was withheld, an additional $97,500 would be due to the IRS when filing taxes.

State taxes further reduce the sum. For a winner residing in a state with a 5% income tax, an additional $37,500 ($750,000 x 5%) would be owed. Combined federal and state taxes on the $750,000 prize could exceed $315,000. The actual take-home amount for a Big Brother winner can be less than half the publicly announced prize, often $400,000 to $450,000, depending on their tax situation and state of residence.