How to Use the W-2G Tax Form to Report Gambling Income
If you've gambled over the past year, you may receive Form W-2G when it's time to file. This form is used to report gambling winnings and losses and determine your tax liability. Generally speaking, you're responsible for taxes on winnings but may also be eligible for deductions on losses. Learn about Form W-2G and how to complete it.
Key Takeaways
- You must report all gambling winnings, even if you don't receive a Form W-2G.
- You generally can deduct gambling losses up to the extent of your winnings.
- A wager payer may withhold part of your winnings for federal income tax purposes.
- If you fail to provide your Social Security number, your winnings may be subject to backup withholding at a rate of 24%.
W-2G Forms Are for Winners
When reporting gambling income, the most important information on the Form W-2G is:
- reportable winnings: This amount indicates gross winnings.
- date won: This is the date of the winning event, not the date on which you were paid the winnings.
- type of wager: If other than a regular race bet, enter the type of wager, such as Daily Double, Big Triple, or Pick 6.
You don't necessarily receive a W-2G for all gambling winnings, but you still need to report all of your winnings. A gaming facility is required to report your winnings on a W-2G when:
- horse race winnings of $600 or more (if the win pays at least 300 times the wager amount)
- bingo or slot machine winnings are $1,200 or more
- keno winnings, less the wager, are $1,500 or more
- poker tournament winnings are more than $5,000
If you receive multiple W-2G forms, you'll need to enter the winnings for each of them when preparing your tax return. You are required to also report winnings even if the payer doesn't send you a Form W-2G. Track your winnings by keeping accurate logs and receipts, such as:
- entry tickets and fees
- wager statements
- payment slips
Such receipts also come in handy if you itemize tax deductions and can deduct your gambling losses. You can deduct gambling losses only up to the extent of gambling winnings, and the losses can't exceed the winnings. For example, if you wagered $5,000 and won $2,000, you can only deduct $2,000 in losses.
TurboTax Tip:
Keep accurate logs and receipts of your winnings to track them for tax purposes.
Withholding Winnings
A payer may also send you a Form W-2G if it withholds part of your winnings for federal income tax purposes. You will find the amount of withholding in box 4 on the form.
Example: If you win a non-state lottery prize of $10,000, the payer could withhold 24% upfront to pay the IRS in the event you fail to report the winnings at tax time. In this case, box 4 would indicate $2,400 ($10,000 x .25 = $2,400).
There are two types of withholding:
- Regular withholding of 24% on cash payments where the winnings minus the wager exceed $5,000; or 33.33% for certain noncash winnings such as a car (this applies to non-state conducted lotteries, sweepstakes, and wagering pools, but not to keno, bingo or slot machine winnings).
- Backup withholding at 24% (for 2024 and 2025) of the payment on bingo, keno, slot machines and poker tournaments (payments that are subject to regular withholding can’t also be subject to backup withholding).
Also, if you failed to provide the payer with your Social Security number, your winnings will typically be subject to backup withholding at a rate of 24%, which the IRS collects from the gaming facility from the amount held back from your winnings.
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