I won a non-cash prize as part of my company's wellness competition. The nominal value is maybe $300-$400 (T-shirts, misc sports clothing).
Now they told me after the fact that this is taxable income, and that they won't cover the tax. They may not have been aware of the tax issue. I am sure the prize was given in good faith, but the items are still not worth the $150 tax to me.
I assume, due to the amount, that it is not a de minimis fringe benefit, and that it is not an achievement award, as these can only be given for length of service or safety achievements.
Is there any other way out of this situation, other than returning the clothing?