Gambling Winnings Tax
Both cash and noncash gambling winnings are fully taxable.
Cash winnings include money you received from:
- Lottery payouts
- Poker and other games
- Slot machines
Your winnings might be noncash — like a vacation or a car. If so, you must include its fair market value (FMV) when figuring your income.
If you itemize your deductions, you can deduct your gambling losses for the year on Schedule A. However, you can only deduct your loss up to the amount you report as gambling winnings. So, you should keep:
- An accurate diary of your gambling winnings and losses
- Documentation of your gambling activity that can be verified
The payer must provide you with a Form W-2G if you win:
- $600 or more if the amount is at least 300 times the wager
- $1,200 or more in winnings from bingo or slot machines
- $1,500 or more in winnings from keno
- More than $5,000 in winnings from a poker tournament
- Any winnings subject to a federal income-tax withholding requirement
If your winnings are reported on a Form W-2G, federal taxes are withheld at a flat rate of 25%. If you didn’t give the payer your tax ID number, the withholding rate is 28%. Withholding is required when the winnings, minus the bet, are:
- More than $5,000
- At least 300 times the amount of the bet
You should receive a copy of your Form W-2G showing the amount you won and the amount of tax withheld. Even if you don’t receive a Form W-2G, include your winnings on your return.
Learn more about reporting Roth IRA contributions with advice from the tax experts at H&R Block.
Learn more about dividends and how they affect your taxes from the experts at H&R Block.
How much investment income can children earn before paying taxes? Learn more from the tax experts at H&R Block.
Would winning the lottery affect your taxes? Learn more about how your taxes could change after a Powerball payout with H&R Block.