At the end of last week, a young Fortnite player Kyle Giersdorf, who goes by his gamer tag “Bugha”, showed his pro skills, became the winner of Fortnite World Cup and earned $3 million. However, he won’t be able to take home all of this money. He may have to spend half of his prize money to pay taxes, due to US taxes.
According to a tweet of Ryan Friend from Rush B Media, the New York State will collect about $2.75 million from the Fortnite World Cup. In other tweets, Ryan said that the New York tax on prize winnings is 8.82%, while the US’ top tax bracket is 39.4%. It means that Bugha not only owes the New York State about $265,000 for winning the World Cup but also have to pay around $1.2 million for the federal government. In total, he will be taxed $1.5 million from his prize money and end up talking home approximately $1.5 million, which is only half of the number that he earned at the competition.
Although the fact that the New York State may receive $2.75 million from the event is a piece of good news, the number of money Bugha have to pay for taxes is still shocking to lots of people. As we know, state governments oftentimes impose a tax on prize winnings. However, to Bugha and his family, it may be an insult that US taxes ended up cutting his prize money in half.
This example is a reversal of recent news that in the UK, Rockstar Games has not paid any taxes over the past 10 years. Politically, there are different thoughts on taxation for a variety of reasons, but we can agree that $1.5 million tax is really huge. After all, Bugha still took a large chunk of money home, but half is also a large amount.