Earlier this week, a Reddit user by the handle of Elvite won the
Microsoft Rewards Xbox Game Pass Lifetime Membership prize, as reported by Pure Xbox. However, they were ultimately forced to turn it down due to tax reasons. In a post on r/MicrosoftRewards, Elvite explained that had they accepted the prize, they would have $7,300 of added taxable income to their 2023 taxes, which would have required them to pay about $1,752 more on their federal tax bill on top of state income tax.
Many of the other Reddit users in the comment section of Elvite’s post have been understanding of their situation, with some commending them for taking the time to read the fine print of the
free Xbox Game Pass membership that many would have taken without a second thought. Others took a moment to note how “eye-opening” the idea of such a prize being more trouble than it would be worth due to taxes, as well as describe how places like the UK don’t tax prizes like the US does.
Indeed, it may seem odd for someone who won a lifetime of free
Xbox Game Pass to turn down this prize, but as Elvite’s recent dilemma reveals, these types of giveaways don’t always come with a happy ending. Luckily they took the time to look into how this
Xbox Game Pass prize would financially affect them in the long run before wholeheartedly accepting it.
