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Taxmap/pubs/p505-006.htm#TXMP6f2f42a4 Gambling Winnings

Winnings

Income tax is withheld at a flat rate from certain kinds of gambling winnings.

Gambling winnings of more than $5,000 from the following sources are subject to income tax withholding.

• Any sweepstakes, wagering pool, or lottery.
• Any other wager if the proceeds are at least 300 times the amount of the bet.

It does not matter whether your winnings are paid in cash, in property, or as an annuity. Winnings not paid in cash are taken into account at their fair market value.

Gambling winnings from bingo, keno, and slot machines are generally not subject to income tax withholding. However, you may need to provide the payer with a social security number to avoid withholding. See Backup withholding on gambling winnings, later. If you receive gambling winnings not subject to withholding, you may need to pay estimated tax. See chapter 2.

If you do not pay enough tax through withholding or estimated tax, you may be subject to a penalty. See chapter 4.

Taxmap/pubs/p505-006.htm#TXMP4f188afa Form W-2G.

If a payer withholds income tax from your gambling winnings, you should receive a Form W-2G, Certain Gambling Winnings, showing the amount you won and the amount withheld.

Report the tax withheld on Form 1040, line 63.

Taxmap/pubs/p505-006.htm#TXMP7667218d Information to give payer.

If the payer asks, you must give the payer all the following information.

• Your name, address, and social security number.
• Whether you made identical wagers (explained later).
• Whether someone else is entitled to any part of the winnings subject to withholding. If so, you must complete Form 5754, Statement by Person(s) Receiving Gambling Winnings, and return it to the payer. The payer will use it to prepare a Form W-2G for each of the winners.

Taxmap/pubs/p505-006.htm#TXMP5755cd9c Identical wagers.

You may have to give the payer a statement of the amount of your winnings, if any, from identical wagers. If this statement is required, the payer will ask you for it. You provide this statement by signing Form W-2G or, if required, Form 5754.

Identical wagers include two bets placed in a pari-mutuel pool on one horse to win a particular race. However, the bets are not identical if one bet is "to win" and one bet is "to place." In addition, they are not identical if the bets were placed in different pari-mutuel pools. For example, a bet in a pool conducted by the racetrack and a bet in a separate pool conducted by an offtrack betting establishment in which the bets are not pooled with those placed at the track are not identical wagers.

Taxmap/pubs/p505-006.htm#TXMP0e145ee5 Backup withholding on gambling winnings.

If you have any kind of gambling winnings and do not give the payer your social security number, the payer may have to withhold income tax at a flat rate. This rule applies to keno winnings of more than $1,500, bingo and slot machine winnings of more than $1,200, and certain other gambling winnings of more than $600.

Previous Page:  Publication 505 - Tax Withholding and Estimated Tax - Pensions and Annuities Next Page:  Publication 505 - Tax Withholding and Estimated Tax - Unemployment Compensation Use     to find additional instances of index items.