Priya PatelTLDR:
- The SAG-AFTRA Foundation distributed millions in financial aid to actors during a strike.
- Some recipients are now facing confusion and scramble during tax season as they receive 1099 tax forms for the grants.
In 2023, the SAG-AFTRA Foundation provided over $11 million in emergency financial assistance to actors in need during a 118-day strike. However, as tax season approaches, some recipients are now grappling with the realization that the grants they received could be considered taxable income. The Foundation has advised recipients to consult their tax advisors to determine how to report the aid and whether they may owe additional income tax as a result.
While some recipients are waiting on clarity before filing their taxes, others are expressing confusion and frustration over the situation. The Foundation believes the grants could be taxable income, prompting recipients to seek professional advice, which may not be financially feasible for all actors still impacted by the strike. The issuance of 1099 tax forms further complicates the matter, with some recipients receiving conflicting information from the Foundation.
Legal experts suggest that hardship grants are typically treated as gifts and exempt from federal income tax, but the unique circumstances of the strike may influence the IRS’s classification of the grants. The SAG-AFTRA Foundation’s decision to issue 1099 forms underscores the complexity of the tax situation for recipients.
Amid the confusion, some recipients are accepting the possibility of paying taxes on the grants, acknowledging it as part of their social contract. However, the situation has highlighted the challenges faced by actors and the need for clearer guidance and support from the Foundation during tax season.
