Income and Investments Gambling Winnings Tax (How Much You Will Pay For Winning?) Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by Ginita Wall Published Mar 3, 2023 - [Updated Dec 27, 2023] 3 min read Reviewed by Katharina Reekmans, Enrolled Agent Most people don’t think about taxes on their way to a racetrack or casino, but what might seem like nothing more than the chance to win some extra money actually has some tax implications. As is often the case, federal and state governments single out casino winnings for unique taxes of their own. Here is what you need to know about how gambling affects your taxes: How Much You Win Matters It’s important for you to know the thresholds that require income reporting by the payer. Winnings in the following amounts must be reported to the IRS by the payer: $600 or more at a horse track (if that is 300 times your bet) $1,200 or more at a slot machine or bingo game $1,500 or more in keno winnings (minus the amount you bet) $5,000 or more in poker tournament winnings (minus the amount you bet or buy-in price) Get started now All of these require giving the payer your Social Security number, as well as filling out IRS Form W2-G to report the full amount won. In most cases, the casino will take 24 percent off your winnings for IRS gambling taxes before paying you. Not all gambling winnings in the amounts above are subject to IRS Form W2-G. W2-G forms are not required for winnings from table games such as blackjack, craps, baccarat, and roulette, regardless of the amount. Note that this does not mean you are exempt from paying taxes or reporting the winnings on your taxes. Any and all gambling winnings must be reported to the IRS. It only means that you do not have to fill out Form W2-G for these particular table-based games. Reporting Smaller Winnings Even if you do not win as much as the amounts above, you are still legally obligated to claim your winnings at tax-time. You also need to report any awards or prize money you won during the year. Yes, even if you only win $10 sports gambling, you still technically have to report it (even if the casino didn’t). Your gambling income also includes the fair market value of prizes such as cars or trips. Gambling income plus your job income (and any other income) equals your total income. Fortunately, you do not necessarily have to pay taxes on all your winnings. Instead, if you itemize your deductions, you can claim your losses up to the amount of your winnings. But the amount of losses you deduct can’t be more than the amount of gambling income you reported on your tax return. *Note, under the tax reform law, the gambling loss limitation was modified. Prior to the tax reform law, taxpayers’ costs (like transportation and admission fees) could be claimed regardless of winnings. But beginning with the tax year 2018 (the taxes filed in 2019), all expenses in connection with gambling, not just gambling losses, are limited to gambling winnings. What About State Taxes? In addition to federal taxes payable to the IRS, many state governments tax gambling income as well. Each state has its own unique formulas and rules for gambling income, and some levy no gambling taxes at all. Some states charge a flat percentage, while others base the state tax on how much you won. TurboTax Has You Covered Don’t worry about knowing these tax rules. Meet with a TurboTax Full Service expert who can prepare, sign and file your taxes, so you can be 100% confident your taxes are done right. Start TurboTax Live Full Service today, in English or Spanish, and get your taxes done and off your mind. Get started now Previous Post Tax Benefits Changing for Tax Year 2022 Next Post The Tax Deadline is Approaching: TurboTax Shares What You Need… Written by Ginita Wall More from Ginita Wall 489 responses to “Gambling Winnings Tax (How Much You Will Pay For Winning?)” « Older Comments Newer Comments » I live in the state of Michigan. My losses far exceeded my winnings. I have been told that for the past couple years there is a law that states that you can claim you are a casual gambler or the gambling can be called sessions, and your wins are limited to the amount you walked out of the casino with (after subtracting the amount that you brought into the casino with). This can be written off from the Michigan state taxes owed. However my tax person failed to put my total amount of winnings on line 21 for my federal return and now I am being audited because of it. I have given her the information from the IRS and she keeps writing to them saying I am a casual gambler, but when I get the response back & take it to her she says she can”t put that amount on line 21 or it would carry over to the state taxes and I could not do the “sessions or casual gambler” Have you any answers for me? have been doing my taxes with a reputable business & bought a “peace of mind insurance” and need to see this thru with them, however the IRS is saying I owe them $5888.00 & then they would report it to the state & I would owe them an additional amount. This is for the year 2010 & the taxes were done the same way for 2011 & my tax preparer says I can expect to go thru the same thing for 2011. Do you have any knowledge of this “sessions” or casual gambling? Reply Good thing you paid for the insurance. Lets hope they back it because as far as I know there is not “sessions.” I have been researching taxable income for winnings now for several years and this is the first I have herd of it. I would also consider getting a new tax person. Good luck. Reply First, you should pay careful attention that your peace of mind claim is being handled properly. If you have to “see this thru with them,” then it sounds as if they are honoring their insurance. Your insurance should cover up to $5500 of that $5888 bill. If your representatives get the bill down below $5500, then the insurance payment will cover your federal bill. If they can get that bill down even lower, then the savings can be applied to any additional state tax you might owe. Seems the total net amount of your winnings should have gone on Line 21 of the 1040 in the beginning. If not, then where did you put it on the original return? Instead of going through the same thing for 2011, you can simply file an amended return for 2011. The problem is that by filing an amended return now, which that company will do for free, you may lose your peace of mind insurance for the 2011 returns. Why? Because I believe the insurance claim starts when you get your first letter from the IRS. If you do an amended return for 2011 now, then you will probably never get a letter. Instead, you will get a bill, and that might not work for the peace of mind insurance. In other words, for the 2011 returns, see if filing amended returns ahead of any letters will cause you to lose your insurance. Finally, 2011 may be salvageable. Reply Gross gambling winnings go on form 1040 line 21, page one based upon the amount you received on the W-2Gs. Losses, up to the amount of winnings, is an itemized deduction on schedule A. If you cannot itemize, or if it does not make sense overall to itemize vs. standard deduction, not certain. TurboTax accepted this approach for itemizers and it is addressed on the official IRS website, If you simply net the amount of losses against winnings and put on line 21 page 1, you will be “hearing” from the IRS and will have a mess on your hands. there is NO a such thing as “sessions” tax law is very CLEAR: YOU WIN(for slot jackpots 1200 or more, for poker tables 5000 or more, for lottery 600 or more, etc) YOU have to pay taxes, so IF I were you I will EVERY TIME casino hand me a W-2G form I will ask the casino to WITHHOLD the taxes for me so I DONT GET ANY SURPRISES at tax time, or I don’t end up spending the money in something else SINCE THAT MONEY is uncles sam’s Reply Hi , Recently i went to casino and Gambled for the CRAPS table by investing 5000$ and i won 10,600, They have asked me the SSN and driving license i had given to them and they didnot provide me any Tax form and they didnot deduct they payed me back 10,600 . Should i need to file the tax for next year else what should i do next step ! Reply Girish, Just because they did not deduct any amount does not mean you are not responsible for taxes. I could be wrong but my understanding was that up until recently “table” gambling was not taxable. However, now it is. I would hold back the 25% federal and what ever your state tax is for your own safety. Last I checked here in Michigan it was 4.35%. However, keep in mind that you can deduct the $5000 you invested. Congrats on the winning. Reply My tax person made an error and listed my losses as my winnings. The state of California doesn’t care as long as you lose as much as you win. My tax person did deduct my loses to match my winnings. I wouldn’t care except the Federal Tax goes by my gross income for taxes on my ss and medicare.That error showed my gross income $700.00 more than it was and I owed IRS $1,483.00. How much did I over pay the IRS because of my tax person’s error? I sent the check to IRS before I noticed his error! Table gambling was always taxable. It is just on the honor system since there is no way of knowing/proving how much was actually won. You are not going to be taxed on $10,000 in chips if you spent $9500 to get it. OR worse, if you start the day with $15,000 chips and you cut your losses and cash out with $10,000, they certainly can’t tax you on that $10,000 when it was actually a $5000 loss. Three of us each put in $100 and won $6,000 on a slot machine, but the casino would only give us one of us a W2G form showing the winning of $6000. Actually the winning was $2,000 per person. Is there anyway we can each get a slip for $2,000 rather than having the one person getting charged for the entire tax. As we each live in seperate states it will make a difference on how we pay the tax Reply Ed, The casino only gave you one W2G, therefore, they have only notified the IRS of one person winning. The only way around that in the future is to create a gambling club and having the club be responsible for the winnings. At this point the person who received the W2G will have to be responsible for the taxes on this winning. Because only one person can claim the winning, the IRS could charge the other two recipients a “Gift” tax for their portion of the winnings. So I would be very careful who you tell about the winnings and how the taxes were done. Put something in writing that this was a mutual collaboration that the winnings would be split three ways. Just between you and I, I would have all parties sign it and date it the day before you won. But you didn’t hear that from me. Good luck Reply What if you lost your WG form the casino gave you? Reply Contact the Casino. They are required to keep a copy on file. Reply just call the casino they will mail you another one in less than a week, and some casinos will even EMAIL you one too, or you can just walk to the casino and ask for another one, it will take like 5 minutes for them Reply If I live in Texas, where we do not have state tax returns, but won around 1,200 at a casino in New Mexico where they do file state taxes, do I have to file a state tax return? (state income tax withheld is 0 on W-2G) Reply i won $1800 in vegas in april 2012 at a slot machine..no taxes were taken out at the time of winning. the casino gave me a receipt, which i have since lost. how do i go about claiming this on my taxes when the casino has yet to send me a w2G form or 1099? is it required for the casino to send this? Reply if i won 2692.00 at the horse track and im going through turbo tax where in turbo tax do i input those wages ????? Reply you MUST have a W-2G form so turbo tax will ask you for it when they say : ” do you have any gambling winnings?”… Reply As someone that works in a casino I can tell you there’s some inaccuracies in this article. First of all the only way you’ll receive a W2G from playing a slot machine is if you win $1,200 or more from a single spin (so winning 2 $600 jackpots does not get you a W2G). If this happens the machine will stop and you will be paid on the spot and give a W2G (don’t worry you’ll also get one in the mail). Also no taxes will be withheld unless you ask the casino to do so. The same goes for table games but you have to win $10,000 from a single bet. Lastly any transaction over $3,000 is recorded and any transaction over $10,000 is reported to the IRS. This used to be known as Regulation 6 now known as Title 31 it’s to prevent money laundering. One last thing, I think you meant to write Slot machine not Slow machine. Reply Thank you for posting this billyinvegas. Interesting stuff. Reply I won $10,000 on a scratch off had the 25% taken out when I file my return my refund is less once I enter my W2-G, I don’t understand this Reply MS Christina, The 25% is a base they are required to take. The taxable rate is based on your total winnings, your income and any other income you may have had. I am not sure what the current tax table is but you may have been charged 28% instead of 25% based on that total income. Reply the 25% is the FEDERAL tax but you still have to pay the STATE(from 3 to 5 % more depends of state) Reply Using TurboTax why do winnings claimed from a 1099-G reduce the refund amount even if identical losses are claimed? Reply I am not looking at your tax return but I would bet that your total winning put your income into a higher tax bracket. The deductions are not calculated until a total income has been determined. Therefore, even though your losses were the same as your winnings, your tax burden percentage did not change. Gotta love our tax system. I would contact turbo tax to insure that this is in fact correct. Reply Same thing happened to me for 2013 winnings at a church bazaar. Accountant said only winnings reported on a W2-G could be offset by losses. Out of luck if reported on a 1099. Sounds crazy. That’s why I’m poking around here looking for answers. Reply « Older Comments Newer Comments » Leave a ReplyCancel reply Browse Related Articles Tax Forms Form 2210 Instructions: How to Calculate and Pay Estimated Taxes to Avoid Penalties Tax Forms What is Form 720? 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I live in the state of Michigan. My losses far exceeded my winnings. I have been told that for the past couple years there is a law that states that you can claim you are a casual gambler or the gambling can be called sessions, and your wins are limited to the amount you walked out of the casino with (after subtracting the amount that you brought into the casino with). This can be written off from the Michigan state taxes owed. However my tax person failed to put my total amount of winnings on line 21 for my federal return and now I am being audited because of it. I have given her the information from the IRS and she keeps writing to them saying I am a casual gambler, but when I get the response back & take it to her she says she can”t put that amount on line 21 or it would carry over to the state taxes and I could not do the “sessions or casual gambler” Have you any answers for me? have been doing my taxes with a reputable business & bought a “peace of mind insurance” and need to see this thru with them, however the IRS is saying I owe them $5888.00 & then they would report it to the state & I would owe them an additional amount. This is for the year 2010 & the taxes were done the same way for 2011 & my tax preparer says I can expect to go thru the same thing for 2011. Do you have any knowledge of this “sessions” or casual gambling? Reply
Good thing you paid for the insurance. Lets hope they back it because as far as I know there is not “sessions.” I have been researching taxable income for winnings now for several years and this is the first I have herd of it. I would also consider getting a new tax person. Good luck. Reply
First, you should pay careful attention that your peace of mind claim is being handled properly. If you have to “see this thru with them,” then it sounds as if they are honoring their insurance. Your insurance should cover up to $5500 of that $5888 bill. If your representatives get the bill down below $5500, then the insurance payment will cover your federal bill. If they can get that bill down even lower, then the savings can be applied to any additional state tax you might owe. Seems the total net amount of your winnings should have gone on Line 21 of the 1040 in the beginning. If not, then where did you put it on the original return? Instead of going through the same thing for 2011, you can simply file an amended return for 2011. The problem is that by filing an amended return now, which that company will do for free, you may lose your peace of mind insurance for the 2011 returns. Why? Because I believe the insurance claim starts when you get your first letter from the IRS. If you do an amended return for 2011 now, then you will probably never get a letter. Instead, you will get a bill, and that might not work for the peace of mind insurance. In other words, for the 2011 returns, see if filing amended returns ahead of any letters will cause you to lose your insurance. Finally, 2011 may be salvageable. Reply
Gross gambling winnings go on form 1040 line 21, page one based upon the amount you received on the W-2Gs. Losses, up to the amount of winnings, is an itemized deduction on schedule A. If you cannot itemize, or if it does not make sense overall to itemize vs. standard deduction, not certain. TurboTax accepted this approach for itemizers and it is addressed on the official IRS website, If you simply net the amount of losses against winnings and put on line 21 page 1, you will be “hearing” from the IRS and will have a mess on your hands.
there is NO a such thing as “sessions” tax law is very CLEAR: YOU WIN(for slot jackpots 1200 or more, for poker tables 5000 or more, for lottery 600 or more, etc) YOU have to pay taxes, so IF I were you I will EVERY TIME casino hand me a W-2G form I will ask the casino to WITHHOLD the taxes for me so I DONT GET ANY SURPRISES at tax time, or I don’t end up spending the money in something else SINCE THAT MONEY is uncles sam’s Reply
Hi , Recently i went to casino and Gambled for the CRAPS table by investing 5000$ and i won 10,600, They have asked me the SSN and driving license i had given to them and they didnot provide me any Tax form and they didnot deduct they payed me back 10,600 . Should i need to file the tax for next year else what should i do next step ! Reply
Girish, Just because they did not deduct any amount does not mean you are not responsible for taxes. I could be wrong but my understanding was that up until recently “table” gambling was not taxable. However, now it is. I would hold back the 25% federal and what ever your state tax is for your own safety. Last I checked here in Michigan it was 4.35%. However, keep in mind that you can deduct the $5000 you invested. Congrats on the winning. Reply
My tax person made an error and listed my losses as my winnings. The state of California doesn’t care as long as you lose as much as you win. My tax person did deduct my loses to match my winnings. I wouldn’t care except the Federal Tax goes by my gross income for taxes on my ss and medicare.That error showed my gross income $700.00 more than it was and I owed IRS $1,483.00. How much did I over pay the IRS because of my tax person’s error? I sent the check to IRS before I noticed his error!
Table gambling was always taxable. It is just on the honor system since there is no way of knowing/proving how much was actually won. You are not going to be taxed on $10,000 in chips if you spent $9500 to get it. OR worse, if you start the day with $15,000 chips and you cut your losses and cash out with $10,000, they certainly can’t tax you on that $10,000 when it was actually a $5000 loss.
Three of us each put in $100 and won $6,000 on a slot machine, but the casino would only give us one of us a W2G form showing the winning of $6000. Actually the winning was $2,000 per person. Is there anyway we can each get a slip for $2,000 rather than having the one person getting charged for the entire tax. As we each live in seperate states it will make a difference on how we pay the tax Reply
Ed, The casino only gave you one W2G, therefore, they have only notified the IRS of one person winning. The only way around that in the future is to create a gambling club and having the club be responsible for the winnings. At this point the person who received the W2G will have to be responsible for the taxes on this winning. Because only one person can claim the winning, the IRS could charge the other two recipients a “Gift” tax for their portion of the winnings. So I would be very careful who you tell about the winnings and how the taxes were done. Put something in writing that this was a mutual collaboration that the winnings would be split three ways. Just between you and I, I would have all parties sign it and date it the day before you won. But you didn’t hear that from me. Good luck Reply
just call the casino they will mail you another one in less than a week, and some casinos will even EMAIL you one too, or you can just walk to the casino and ask for another one, it will take like 5 minutes for them Reply
If I live in Texas, where we do not have state tax returns, but won around 1,200 at a casino in New Mexico where they do file state taxes, do I have to file a state tax return? (state income tax withheld is 0 on W-2G) Reply
i won $1800 in vegas in april 2012 at a slot machine..no taxes were taken out at the time of winning. the casino gave me a receipt, which i have since lost. how do i go about claiming this on my taxes when the casino has yet to send me a w2G form or 1099? is it required for the casino to send this? Reply
if i won 2692.00 at the horse track and im going through turbo tax where in turbo tax do i input those wages ????? Reply
you MUST have a W-2G form so turbo tax will ask you for it when they say : ” do you have any gambling winnings?”… Reply
As someone that works in a casino I can tell you there’s some inaccuracies in this article. First of all the only way you’ll receive a W2G from playing a slot machine is if you win $1,200 or more from a single spin (so winning 2 $600 jackpots does not get you a W2G). If this happens the machine will stop and you will be paid on the spot and give a W2G (don’t worry you’ll also get one in the mail). Also no taxes will be withheld unless you ask the casino to do so. The same goes for table games but you have to win $10,000 from a single bet. Lastly any transaction over $3,000 is recorded and any transaction over $10,000 is reported to the IRS. This used to be known as Regulation 6 now known as Title 31 it’s to prevent money laundering. One last thing, I think you meant to write Slot machine not Slow machine. Reply
I won $10,000 on a scratch off had the 25% taken out when I file my return my refund is less once I enter my W2-G, I don’t understand this Reply
MS Christina, The 25% is a base they are required to take. The taxable rate is based on your total winnings, your income and any other income you may have had. I am not sure what the current tax table is but you may have been charged 28% instead of 25% based on that total income. Reply
the 25% is the FEDERAL tax but you still have to pay the STATE(from 3 to 5 % more depends of state) Reply
Using TurboTax why do winnings claimed from a 1099-G reduce the refund amount even if identical losses are claimed? Reply
I am not looking at your tax return but I would bet that your total winning put your income into a higher tax bracket. The deductions are not calculated until a total income has been determined. Therefore, even though your losses were the same as your winnings, your tax burden percentage did not change. Gotta love our tax system. I would contact turbo tax to insure that this is in fact correct. Reply
Same thing happened to me for 2013 winnings at a church bazaar. Accountant said only winnings reported on a W2-G could be offset by losses. Out of luck if reported on a 1099. Sounds crazy. That’s why I’m poking around here looking for answers. Reply