Publication 15a |
2000 Tax Year |
Chapter 11 Tables for Withholding on Distributions of Indian Gaming Profits to Tribal Members
If you make certain payments to members of Indian tribes from
gaming profits, you must withhold Federal income tax. You must
withhold if (1) the total payment to a member for the year is over
$7,450 and (2) the payment is from the net revenues of class II or
class III gaming activities (classified by the Indian Gaming
Regulatory Act) conducted or licensed by the tribes.
A class I gaming activity is not subject to this withholding
requirement. Class I activities are social games solely for
prizes of minimal value or traditional forms of Indian gaming engaged
in as part of tribal ceremonies or celebrations.
Class II.
Class II includes (1) bingo and similar games, such as pull tabs,
punch boards, tip jars, lotto, and instant bingo, and (2) card games
that are authorized by the state or that are not explicitly prohibited
by the state and played at a location within the state.
Class III.
A class III gaming activity is any gaming that is not class I or
class II. Class III includes horse racing, dog racing, jai alai,
casino gaming, and slot machines.
Withholding Tables
To figure the amount of tax to withhold each time you make a
payment, use the table on page 59 for the period for which you make
payments. For example, if you make payments weekly, use table 1; if
you make payments monthly, use table 4. If the total payments to an
individual for the year are $7,450 or less, no withholding is
required.
Example:
A tribal member is paid monthly. The monthly payment is $5,000.
Using Table 4, Monthly Distribution Period, figure the withholding as
follows:
Subtract $2,875 from the $5,000 payment for a remainder of $2,125.
Multiply this amount by 28%, for a total of $595.00. Add $338.10, for
total withholding of $933.10.
Depositing and reporting withholding.
Combine the Indian gaming withholding with all other nonpayroll
withholding (e.g., backup withholding and withholding on gambling
winnings). Generally, you must deposit the amounts withheld by
electronic funds transfer (see page 2) or at an authorized financial
institution using Form 8109, Federal Tax Deposit Coupon.
See Circular E, Employer's Tax Guide, for a detailed
discussion of the deposit requirements.
Report Indian gaming withholding on Form 945, Annual
Return of Withheld Federal Income Tax. For more information, see Form
945 and its instructions. Also, report the payments and withholding to
tribal members and to the IRS on Form 1099-MISC,
Miscellaneous Income (see the Instructions for Forms 1099,
1098, 5498, and W-2G ).
Indian Gaming Profits
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