McDonald's Monopoly Player Wins Carnival Cruise. So, Taxes?

Carnival cruise (l) man plays McDonalds Monopoly (c) McDonalds entrance (r)

A man won a trip on Carnival Cruises through McDonald's Monopoly. Now, the internet is warning him about the tax bill.

McDonald’s Monopoly is currently underway. Many players are spending their days trying to find the right pieces to complete their prizes, like a or a shiny new Polaris or a Carnival Cruise trip. Meanwhile, those who have actually won have something else on the mind: taxes.

The McDonald’s Monopoly sweepstakes has been going on since 1987. In that time, people have won some pretty incredible prizes. For example, several people have won a million dollars. Some have even scored rewards like a house or a Mini Cooper.

But, as the old saying goes, nothing in this life is free. As more people are bringing home prizes, they’re being confronted with the potential tax burden of their win. Contrary to popular belief, it’s a factor in more than just cash prizes. Here’s what you need to know if you win.

What Did This Man Win?

In a video with over 2.2 million views, TikTok user Gretchen (@gretchwin) shows a man’s phone. The phone prominently displays the words “You Won!”

“This is not real,” she starts.

The screen indicates that the man, named Milo, won a Carnival Cruise vacation subject to verification.

“You won a Carnival Cruise!” exclaims Gretchen. Milo is in such disbelief that he can barely get a word out.

While many of the comments celebrated Milo’s win or lamented the commenters’ lack of wins, some were quick to mention the potential tax implications of such a prize.

“Wait do you have to pay taxes for everything?” asked a user. “I seen a lady won the jeep but she gotta pay like 10k in taxes.”

“Just take the cash value, have them deduct taxes and walk away with whatever is left,” advised another.

But wait, how much will Milo owe in taxes?

McDonald’s Monopoly And Taxes

In the United States, competition, lottery, and sweepstakes winnings are all typically subject to both federal and state taxes. This is the case even if the winnings are not straight cash.

For example, if you win a computer valued at $2,000, you will be expected to pay taxes as though you were given the $2,000 in cash.

It’s been reported that the Carnival Cruise vacation package being offered in the McDonald’s Monopoly game is worth $10,000. McDonald’s official documentation states that this is provided in the form of Carnival Cruise Line gift cards alongside prepaid gift cards for travel expenses.

Gretchen says her account is based in Utah. Provided that he won in this state, acceptance of the prize means that Milo will incur taxes at both the state and federal level.

How Much Will He Have To Pay?

That said, the actual amount one has to pay in taxes for prize winnings is often overstated.

Assuming that Milo is single, takes the standard deduction, has no dependents or other special tax credits, receives the prize this year, and earns $50,000 per year, he will probably have to pay around $1,775 in total additional taxes. This includes a $1,200 federal tax on the prize and a $575 state tax. While this is a substantial amount of money, it’s only a fraction of the prize’s $10,000 value.

Depending on his income, however, he may not owe any taxes at all. For example, if he’s a non-working student, his total income for the year in addition to the prize may be less than $16,100. If this is the case, he may not need to pay any taxes.

It should be noted that just “swapping the cruise out for cash” isn’t an option. McDonald’s rules explicitly say that the $10,000 Carnival Cruise vacation package cannot be exchanged for cash or another gift card.

This means Milo must decide whether he takes the cruise and pays the (potential) tax bill or simply walks away empty-handed.

Don’t Forget To Save Your Pieces

If Milo decides to take the cruise, he better hope he saved his game pieces.

Many commenters noted that “subject to verification” means that McDonald’s will review your physical game pieces.

“For a Collect to Win Prize, you will need to submit the Game Pieces in order to claim the applicable prize,” reads the official rule set. Scanning the game pieces into the McDonald’s app is not sufficient proof of ownership, either—McDonald’s requires the original physical pieces for Collect to Win prize verification.

So, if you’re playing McDonald’s Monopoly, hold onto your game pieces. Otherwise, you don’t only have taxes to worry about.