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 am on disability from WA state I moved to Co. I have never filed taxes in Co.. I am tax exempt ..if I was to win a jackpot in Colorado how n to whom would I pay? Reply I won several jackpots on slots ranging from 1200 to 2800. I thought if the casino withheld state and federal taxes, then I did not have to report these jackpots on W2. What can I do at this point, as this took place over the past 3 years? Thanks. Reply If someone wins over $200,000 in illegal gambling over a course of two years (some deposited in the bank, and the rest on a debit/gift card), is that income taxable? Reply yes IT IS TAXABLE under “OTHERS” section (FORM 1040)and IRS will be suspicious if they see you buying a house, a car etc. and then you will be in DEEP TROUBLE.(ALSO BANKS, CREDIT CARD COMPANIES KEEP RECORD AND IF THEY SUSPECT OF ANY LARGE TRANSACTIONS, THEY WILL REPORT YOU TOO) Reply Hi I recently won 16,895’on a slot machine in az that is my latest win but I probally have a additional wg-2 slips amounting to about 14,000 for a toatalmofn30,895 but out of the 14,000 I probally spentb10,000 to win the 14 and probally another 2,000 to win the 16 so I have to pay taxes on ? And how long do u have to pay them Reply I play blackjack and rarely loose…I never make over 500 a session. I have two other jobs. Do I pay taxes Reply “rarely loose?” well you must be a mathematician or plain lucky but that’s another story, so if I were you I will see how much money I make at the END OF THE YEAR and report that amount in the “others” section in my 1040 form, also assuming that IS THE ONLY winnings since if you play slots and hit a jackpot over 1200 then is a different rule, or if you play poker and win over 5000 then is also a different rule Reply Hi, How does the tax for winnings apply to on-line casinos that are outside the United States? Those casinos don’t report to IRS and they don’t send W-2 or 1099. Thank you. Cassie Reply It would be the honor system. Chances are, you will not get caught unless it is a large amount or you do something dumb like try to pay cash for a car that is worth more than your reported income. Reply I have a friend who gambles quite a bit in Michigan at the slots in the casino. I believe I understand the federal ramifications. As to the State of Michigan MI-1040, can losses offset any or all of the winnings? Of course her losses exceed winnings. The gross winnings were included in federal AGI thus carried over to Michigan as taxable income because Michigan starts with federal AGI which includes the gross amount of winnings. I subtracted the amount of the gross winnings included in federal AGI on the MI-1040 as a “subtraction” line 20 on Schedule 1 “Additions and Subtractions” as a miscellaneous subtraction. Well, the Michigan Department of the Treasury wants to see all of her w-2s now, which I would assume would include the W-2G forms and her federal 1040 which clearly states “gambling winnings” on line 21 I believe it is. So far it seems like a grey area but I’m leaning toward taxable with no offset or netting allowed. Knowing the State of Michigan this is probably the case but I cannot find any specific language regarding this It’s going to cost her about a grand plus interest and probably penalties. Any suggestions or comments please. Should she just send in the W-2G’s and her federal return and pray? It is probably not worth paying a professional (one who charges a fee). Thanks. Reply I recently received a letter from the IRS, reminding me I owe. When I return the letter in agreement, what basically takes place. Just thought I would mention, I have been declared disabled,as of Feb 2013, as a result of Parkinson’s and could’nt tell you what has happened the last 5 years. Apparently, the drugs that I have been taking have contributed to much of my problem. Requip, Sinamet,etc. Any thoughts. Thanks. RC Reply From what I have read and witnessed, you are correct in surmising that certain PD medications can contribute to compulsive behavior. It is also possible that your recollections of the past 5 years have been affected by – and I hate to say this – the disease itself as cognitive skill loss is a drastic side effect of non-motor skill type Parkinson’s. If you were given to compulsive gambling as a medication side effect of dopaminergics, MAO inhibitors or dopamine agonists, it is equally likely that many of your losses were the result of online gambling where you or an computer specialist might be able to locate a record on your computer. Keep in mind that this explanation is not an affirmative defense with IRS, it just means that you might have lost more than you won and therefore have a legitimate deduction. At that point, you need to find a really good tax accountant. As a matter of fact, that is probably the first thing you should so. Best wishes Reply Hello, I live in Washington state but won slot machine winnings of 1494.00 in Oregon. In Washington we don’t do state tax filings. But in Oregon they do. So do I need to file a Oregon state tax? Reply I live in Washington State also.I go to Oregon with my wife to play slots & bingo.What happen when we win big at Slots or Bingo?No state income Tax in Washington.I’ll declare my total win on the W2G FORM and have the Casino take out 28% to the IRS. Reply I live in Texas and won a slot jackpot in Oklahoma. They gave me a W2G, but they did not take any taxes out because their computer was down. Do I have to file a return for OK and if so which return? Reply Winstar casino gave me a 1013 to file when I won $1835.00…what do I have to pay out when I file my taxes? 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 am on disability from WA state I moved to Co. I have never filed taxes in Co.. I am tax exempt ..if I was to win a jackpot in Colorado how n to whom would I pay? Reply
I won several jackpots on slots ranging from 1200 to 2800. I thought if the casino withheld state and federal taxes, then I did not have to report these jackpots on W2. What can I do at this point, as this took place over the past 3 years? Thanks. Reply
If someone wins over $200,000 in illegal gambling over a course of two years (some deposited in the bank, and the rest on a debit/gift card), is that income taxable? Reply
yes IT IS TAXABLE under “OTHERS” section (FORM 1040)and IRS will be suspicious if they see you buying a house, a car etc. and then you will be in DEEP TROUBLE.(ALSO BANKS, CREDIT CARD COMPANIES KEEP RECORD AND IF THEY SUSPECT OF ANY LARGE TRANSACTIONS, THEY WILL REPORT YOU TOO) Reply
Hi I recently won 16,895’on a slot machine in az that is my latest win but I probally have a additional wg-2 slips amounting to about 14,000 for a toatalmofn30,895 but out of the 14,000 I probally spentb10,000 to win the 14 and probally another 2,000 to win the 16 so I have to pay taxes on ? And how long do u have to pay them Reply
I play blackjack and rarely loose…I never make over 500 a session. I have two other jobs. Do I pay taxes Reply
“rarely loose?” well you must be a mathematician or plain lucky but that’s another story, so if I were you I will see how much money I make at the END OF THE YEAR and report that amount in the “others” section in my 1040 form, also assuming that IS THE ONLY winnings since if you play slots and hit a jackpot over 1200 then is a different rule, or if you play poker and win over 5000 then is also a different rule Reply
Hi, How does the tax for winnings apply to on-line casinos that are outside the United States? Those casinos don’t report to IRS and they don’t send W-2 or 1099. Thank you. Cassie Reply
It would be the honor system. Chances are, you will not get caught unless it is a large amount or you do something dumb like try to pay cash for a car that is worth more than your reported income. Reply
I have a friend who gambles quite a bit in Michigan at the slots in the casino. I believe I understand the federal ramifications. As to the State of Michigan MI-1040, can losses offset any or all of the winnings? Of course her losses exceed winnings. The gross winnings were included in federal AGI thus carried over to Michigan as taxable income because Michigan starts with federal AGI which includes the gross amount of winnings. I subtracted the amount of the gross winnings included in federal AGI on the MI-1040 as a “subtraction” line 20 on Schedule 1 “Additions and Subtractions” as a miscellaneous subtraction. Well, the Michigan Department of the Treasury wants to see all of her w-2s now, which I would assume would include the W-2G forms and her federal 1040 which clearly states “gambling winnings” on line 21 I believe it is. So far it seems like a grey area but I’m leaning toward taxable with no offset or netting allowed. Knowing the State of Michigan this is probably the case but I cannot find any specific language regarding this It’s going to cost her about a grand plus interest and probably penalties. Any suggestions or comments please. Should she just send in the W-2G’s and her federal return and pray? It is probably not worth paying a professional (one who charges a fee). Thanks. Reply
I recently received a letter from the IRS, reminding me I owe. When I return the letter in agreement, what basically takes place. Just thought I would mention, I have been declared disabled,as of Feb 2013, as a result of Parkinson’s and could’nt tell you what has happened the last 5 years. Apparently, the drugs that I have been taking have contributed to much of my problem. Requip, Sinamet,etc. Any thoughts. Thanks. RC Reply
From what I have read and witnessed, you are correct in surmising that certain PD medications can contribute to compulsive behavior. It is also possible that your recollections of the past 5 years have been affected by – and I hate to say this – the disease itself as cognitive skill loss is a drastic side effect of non-motor skill type Parkinson’s. If you were given to compulsive gambling as a medication side effect of dopaminergics, MAO inhibitors or dopamine agonists, it is equally likely that many of your losses were the result of online gambling where you or an computer specialist might be able to locate a record on your computer. Keep in mind that this explanation is not an affirmative defense with IRS, it just means that you might have lost more than you won and therefore have a legitimate deduction. At that point, you need to find a really good tax accountant. As a matter of fact, that is probably the first thing you should so. Best wishes Reply
Hello, I live in Washington state but won slot machine winnings of 1494.00 in Oregon. In Washington we don’t do state tax filings. But in Oregon they do. So do I need to file a Oregon state tax? Reply
I live in Washington State also.I go to Oregon with my wife to play slots & bingo.What happen when we win big at Slots or Bingo?No state income Tax in Washington.I’ll declare my total win on the W2G FORM and have the Casino take out 28% to the IRS. Reply
I live in Texas and won a slot jackpot in Oklahoma. They gave me a W2G, but they did not take any taxes out because their computer was down. Do I have to file a return for OK and if so which return? Reply
Winstar casino gave me a 1013 to file when I won $1835.00…what do I have to pay out when I file my taxes? Reply