Form W-2G
All states | 3 types
Form W-2G reports large gambling winnings and any federal taxes withheld. Unlike regular income, gambling winnings must be reported separately if they exceed certain limits.
When Is a Form W-2G Used?
Not all gambling winnings trigger a form W-2G. The payer must only issue the form if your winnings exceed specific amounts or meet certain conditions. The IRS has established clear thresholds for reporting, which depend on the type of gambling activity.
Here’s when a W 2G form is required:
- Lotteries & Sweepstakes — $600+ if 300x the wager.
- Slot Machines & Bingo — $1,200+ (not reduced by wager).
- Keno — $1,500+ after subtracting the wager.
- Poker Tournaments — $5,000+ after deducting the entry fee.
- Pari-Mutuel Betting (Horse & Dog Racing) — $600+ if 300x the wager.
If federal tax was withheld — usually 24% for gambling winnings — the payer must file W-2G tax form, no matter the amount won.
Parties Involved
Winner (Taxpayer)
- The recipient of the gambling winnings.
- Must include the winning amount in their annual tax return.
- Responsible for any unpaid taxes beyond amounts withheld.
Payer (Issuer of W-2G)
- The entity or business facilitating and distributing winnings.
- Responsible for withholding taxes (if applicable) and issuing the form to the gambler and the IRS.
IRS
- Matches reported winnings with the individual’s tax return
- May take enforcement action if winnings are not correctly reported
Key Terms
- Gambling Winnings. Any prize from games of chance, including lottery, casino games, horse betting, or poker.
- Wager. The amount of money bet on the game or event.
- Withholding Tax. The percentage of winnings automatically taken out for federal taxes before the winner is paid (24% in most cases).
- Reportable Winnings. Gambling income meeting the IRS criteria for mandatory reporting.
- Taxpayer Identification Number (TIN). Usually, a Social Security number (SSN) used to identify the gambler for tax purposes.
Elements of a Form W-2G
A W-2G form contains several key pieces of information:
Payer Information. The name, address, and Taxpayer Identification Number (TIN) of the issuing gambling establishment.
Winner’s Information. The recipient's full name, address, and Social Security number.
Date and Type of Wager. Specifics about the game or contest associated with the winnings.
Winning Amount. The exact figure won before any deductions.
Federal and State Tax Withholding. If applicable, the amount withheld for tax purposes.
Identification Number. A unique tracking number assigned to the transaction.
How To Fill Out a Form W-2G?
- Enter Payer and Winner Details. Fill in the name and address of the payer (casino, lottery agency, etc.). Include the winner’s name, SSN, and address in the designated fields, as stated in the W-2G instructions.
- Report the Gambling Winnings. Provide the total amount won before taxes, the date and type of wager (e.g., Lottery, Poker, Slots), and any additional event details necessary to clarify the transaction.
- Record Federal Tax Withholding. Specify that amount if federal taxes were withheld (usually 24%). State withholding (if applicable) should also be indicated.
- Issue Copies of The Form. Send Copy A to the IRS, provide Copy B to the winner for their tax records, and retain Copy C of forms W 2G for the payer’s records.