Jeffrey “Jeff” Randall Allen, also known as ‘Player 831’ beat out 999 other contestants to win MrBeast’s first ever ‘Beast Games’ with a life-changing $10 million grand prize. Allen, an Ohio-born father of two who now resides in California, received the lump-sum payout via wire transfer immediately after his victory aired. But as with any massive winnings, a hefty portion of that prize will ultimately belong to federal and state tax authorities, leaving Allen with far less than the headline amount once the IRS and California’s Franchise Tax Board take their shares.
The $10 Million Windfall and Its Winner
MrBeast (Jimmy Donaldson) shocked viewers in the finale by doubling the promised prize from $5 to $10 million after a climactic coin toss. Allen dramatically secured the win by guessing the one briefcase out of ten that contained the winning check on his first try. The 42-year-old Allen, a former sales executive, entered the competition with a deeply personal mission: funding research for his 7-year-old son’s rare illness, creatine transporter deficiency (CTD). Having relocated to California for work after growing up in Ohio, Allen’s state of residency at the time of winning is firmly California – a crucial detail for his tax situation.
Winning $10 million in a game show is treated just like earning $10 million in salary or business income in the eyes of U.S. tax law. There’s no special exemption for prize money: it’s considered ordinary taxable income and subject to the top federal tax rates. Moreover, California’s high tax rates mean the Golden State will claim one of the largest state-level portions of his winnings.
Federal Tax: Uncle Sam’s 37% Share
At $10 million of additional income, Allen will find himself in the highest federal income tax bracket, which carries a 37% marginal tax rate on ordinary income. All game show and contest winnings are taxable, and the IRS requires winners to report the full amount as income on their tax return. The federal government doesn’t automatically withhold income taxes from game show prizes in the way it does for lottery jackpots, so it’s up to Allen to pay the required taxes (usually through quarterly estimated payments or a big payment by April 15).
Also Read: IRS To Lay Off Thousands Starting Next Week
Federal tax calculation:
- Prize Amount: $10,000,000
- Federal Tax Rate (37% top bracket): ≈ $3,700,000 owed
- Net After Federal Taxes: ≈ $6,300,000
While the first few hundred thousand dollars of income are taxed at lower rates (10%, 12%, 22%, etc.), the vast majority of Allen’s prize is taxed at 37%, so his federal tax bill will be very close to $3.7 million.
California’s Cut: State Income Taxes
Because Allen resides in California, he also faces state income tax on his Beast Games winnings at California’s top marginal tax rate, which is 13.3% for income over $1 million. Unlike some states with no income tax, California takes a significant portion of large windfalls.
California state tax calculation:
- State Tax Rate (13.3% top bracket): ≈ $1,330,000 owed
- Net After State Taxes: ≈ $4,970,000
California also does not allow prize winners to deduct state taxes from their federal taxable income due to the SALT deduction cap. This means Allen’s total tax bill is effectively higher compared to winners in tax-free states like Florida or Texas.
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Few Deductions or Loopholes for Prize Money
Unlike capital gains or certain investments, a prize windfall offers few avenues to reduce the taxable amount. Allen cannot claim that $10 million as a gift or inheritance – it’s treated as fully taxable income. Moreover, recent tax law changes eliminated deductions for miscellaneous itemized expenses, meaning that any money spent on travel, lodging, or preparation for the competition cannot be written off.
One potential tax-saving strategy would be charitable donations. If Allen donates a significant portion of his Beast Games earnings to qualified charities, he could claim deductions up to 60% of his adjusted gross income (AGI). For example, if he donates $5 million to CTD medical research, his taxable income could drop, reducing both federal and state tax liabilities.
After-Tax Payout: About $5 Million
When all is said and done, Jeff Allen’s take-home from the $10 million prize will be only about half of the original amount after federal and state taxes. Here’s a final breakdown:
- Gross Prize Winnings: $10,000,000
- Federal Income Tax (37% top rate): ≈ $3,700,000 owed
- California State Tax (13.3% top rate): ≈ $1,330,000 owed
- Total Tax Obligation: ≈ $4,970,000 (50.3% of the prize)
- Net “Take-Home” after Taxes: ≈ $5,030,000
Even though $5.03 million is still a life-changing amount, this serves as a reminder that winning a large prize is not the same as keeping the full amount. Federal and state taxes will always claim a significant share, especially in high-tax states like California.
Allen appears prepared for this reality. “I feel like I’ve already won because I got to talk about Lucas’s condition… anything on top of that is just gravy,” he told The Columbus Dispatch. His victory is still monumental, but his case is a textbook example of how a $10 million publicized prize translates into about a $5 million after-tax payday once Uncle Sam and California take their share.
