They say the only two certainties in life are death and taxes, and that even applies to any New York gambling winnings you earned in 2022.
Filing taxes on the cash you made gambling can be confusing, so we’re going to answer any questions you might have.
If you were lucky enough to cash in some major paydays through one of New York’s licensed betting options or lottery games, then you may be required to file NY gambling taxes on those before tax day comes on April 18. The state of New York considers that income, therefore some money is owed to Uncle Sam.
Getting the aid of a tax professional is a good route to choose, though New York’s tax laws as they pertain to gambling can be easy to understand. Below is the most important information to know.
When it comes to filing taxes, better to be safe than sorry
If you’re unsure about whether it’s required for you to file taxes on your NY gambling winnings, it’s better to play it safe and submit the proper forms.
You should report everything when it may not be necessary, rather than risk underreporting.
The odds of the IRS auditing you may be higher than the Jets and Giants meeting in the Super Bowl. But underreporting gives the IRS the right to send fines that could potentially wipe out your savings account.
What to know about reporting money from NY gambling wagers
Here are a few questions commonly asked by New Yorkers:
What game types require tax filings?
There are multiple variations of gambling that must be reported to the IRS. The list includes:
- NY casino games
- Slot machines
- NY sports betting
- Betting pools
- Bingo
- NY Lottery
- Keno
- Poker
- Sweepstakes
- Raffles
- Game shows
- Horse and dog racing
- Off-track betting (OTBs)
How much must you win for tax filing to be required?
Clearly, there are many game types that require tax filing. So the game type you played isn’t as important as the total amount won.
Here are the IRS’ minimum thresholds:
- $1,200 from bingo or slots, not reduced by the wager.
- $1,500 from keno, reduced by the wager.
- $5,000 from poker, reduced by the wager or buy-in.
- $600 or more or minimally 300 times the amount wagered for any other game types outside the ones mentioned above. This total is reduced by the wager.
Just like your yearly income at work, this is cumulative throughout the year.
How do you file taxes when splitting the winnings with a group?
It’s very common for co-workers to go in on a New York Lottery ticket. Or for a group of friends to pool their money together and place sports bets.
Regardless of your situation, if your total winnings surpass the thresholds listed above and you’re splitting the winnings with other people, there’s a special way to file those taxes.
The gambling company that paid out your winnings will send your Form 5754 and NY form IT-340. On those forms, you must put the identifying information of everyone in the group. Once that’s completed, make a copy for each person and send them back to the gambling company.
Each individual will then receive Form W-2G and IT-2012-G, and those forms will be used to file your taxes on the winnings.
The all-important Form W-2G
If you hit it big on the lottery, at the casino, on a sportsbook app and so on, the entity that paid out your winnings will send Form W-2G. You don’t even have to fill it out — they will.
You do need to provide relevant information like your mailing address, but they’ll handle the rest. On Form W-2G is two key pieces on information:
- Your total winnings from the year paid out by that company.
- Any amount the company withheld from your winnings.
In New York, it’s standard for a gambling company to withhold 25% of your winnings if you provide your Social Security number. If you opt not to share it, up to 28% can be withheld.
After gathering all your W-2Gs, all you have to do is add and transfer your totals to your federal income tax return documents.
