ByNew York State Lottery Subscriptions: What Happens if You Win with Taxes?
Many people have become millionaires as a result of the lottery, including a man from Sullivan County who won a $326 million prize in 2014. Unfortunately, not all New York State Lottery winners are aware of .
- Winnings over $600 are reported to the IRS.
- Winnings over $5,000 are subject to state and federal income tax.
This rule applies to individual winners as well as group winners, and multi-state lottery wins. Winners living in certain areas, including New York City or Yonkers, also have their winnings subject to local tax. DoNotPay’s Casino Taxes product can easily help you calculate withholding and report your winnings to the IRS, state, and local tax authorities.
How Do You Report Your New York State Lottery Winnings?
If you win more than $600 in the lottery, but less than $5,000, you only need to report the winnings on your taxes if they result in your overall income exceeding the reporting threshold. If your winnings are more than $5,000, the New York State Lottery (or other payers) is required to send you a W-2G form. This form lists the amount you won as well as any taxes that were withheld from your winnings. If your winnings were non-cash, such as if you won a house or a boat, then the fair market value of your prize would be reported on the W-2G.
When you complete and file your tax returns for the year in which you obtained your lottery winnings, you will use the information on the W-2G form to report the income.
Can You Deduct Lottery Losses?
The rules regarding reporting lottery income fall under casino taxes and the reporting of both gambling wins, which can be subject to tax, as well as gambling losses, which can theoretically be deducted from your taxes. Note the word "theoretically.” Due to the passage of the Tax Cuts and Jobs Act of 2017, most individuals choose to use the standardized deduction rather than itemizing deductions on their tax returns. Gambling losses can only be deducted if you itemize your deductions.
In order to obtain a deduction for your lottery losses, you should have the following three pieces information:
- Your W-2G
- Losing lottery tickets with dates and locations of where they were purchased
- Relevant bank statements or other financial statements indicating the expenditure for lottery tickets
The IRS only allows you to deduct the amount of winning wagers. What this means is that if you spent $10,000 for lottery tickets overall throughout the year and won $3,000, you can only deduct $3,000 of the loss from your tax burden.
What to Do If You Do Not Receive a W-2G
If you do not receive a W-2G from the New York State Lottery or the payer of a multi-state lottery game, you can do one of the following:
| Request a Form W-2G or other statement of winnings from the payer | Even if your winnings did not meet the reporting threshold, the payer should have record of the transaction. |
| Rely on your own receipts and records of your wins and losses in order to report them to the IRS | In New York, even in the absence of a Form W-2G to report the earnings, you are required to keep track of this information on your own. |
Report Your Lottery Winnings Easily with DoNotPay
Reporting lottery winnings can be difficult and time-consuming, particularly if you did not keep your own records and the payee failed to provide the proper tax form. Fortunately, DoNotPay's Casino Taxes product can help you to file a request for your W-2G from the New York State Lottery and generate a statement request letter on your behalf with a simple click of a button.
How to Request a Gambling Wins/Losses Statement Through DoNotPay
If you want to request a gambling wins/losses statement but don't know where to start, DoNotPay has you covered in 5 easy steps:
- Search gambling tax deduction on DoNotPay.
- Enter the name of the casino and indicate whether it's online or in person.
- Tell us more about the dates and games you played, so the casino can identify your playing records.
- Select whether you have a players card or other form of membership with the casino and enter the relevant details. You also have the option to review other documents when filing deductions.
- Select whether you want DoNotPay to mail the form for you.
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