You may be required to withhold 25% of gambling winnings for federal income tax. This is referred to as regular gambling withholding. Withhold at the 25% rate if the winnings are more than $5,000 and are from:

Do not withhold at the 25% rate on winnings from bingo, keno, or slot machines or any other wagering transaction if the winnings are $5,000 or less. However, see Backup Withholding below.

Regular gambling withholding applies to the total amount of gross proceeds (the amount of winnings less the amount wagered), not merely to the amount in excess of $5,000.

Report the amount you withheld in box 2 of Form W-2G. Also file Form 945, Annual Return of Withheld Federal Income Tax, to report all your gambling withholding.

You may be required to withhold 28% of gambling winnings (including winnings from bingo, keno, and slot machines) for federal income tax. This is referred to as backup withholding. You should backup withhold at the 28% rate if:

Backup withholding applies to the total amount of the winnings reduced, at the option of the payer, by the amount wagered. This means the total amount, not just the payments in excess of $600, $1,200, or $1,500, is subject to backup withholding at 28%.

Report the amount you withheld in box 2 of Form W-2G. Also file Form 945 to report all backup withholding. You may use Form W-9, Request for Taxpayer Identification Number and Certification, to request the TIN of the recipient.

See the instructions on the following pages for each type of gambling for detailed rules on backup withholding.

Payments of gambling winnings to a nonresident alien individual or a foreign entity are not subject to reporting or withholding on Form W-2G. Generally, gambling winnings paid to a foreign person are subject to 30% withholding under sections 1441(a) and 1442(a) and are reportable on Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, and Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding. Winnings of a nonresident alien from blackjack, baccarat, craps, roulette, big-6 wheel, or a live dog or horse race in the United States from legal wagers initiated outside the United States in a parimutuel pool are not subject to withholding or reporting. See Pub. 515, Withholding of Tax on Nonresident Aliens and Foreign Entities.

If state income tax withholding is required on gambling winnings in your state, you may want to complete boxes 13 and 14 on Form W-2G. Copy 1 of the form may be used to provide information to the state, and Copy 2 may be used as the winner's copy for use in filing a state income tax return. A state identification number is assigned by each individual state.

You must withhold federal income tax, at the rate of 25% (regular gambling withholding), from the amount of winnings less the amount wagered. Do this if the winnings less the wager exceed $5,000 and if the winnings are at least 300 times the amount of the wager.

If the winner of reportable gambling winnings does not provide a TIN, you must backup withhold at the rate of 28% on any such winnings that are not subject to 25% regular gambling withholding. That is, backup withholding applies if the winnings are at least $600 but not more than $5,000 and are at least 300 times the wager. Figure the 28% backup withholding on the amount of the winnings reduced, at the option of the payer, by the amount wagered.

For multiple wagers sold on one ticket, such as the $12 box bet on a Big Triple or Trifecta, the wager is considered as six $2 bets and not one $12 bet for purposes of computing the amount to be reported or withheld. Winnings on a $12 box bet must be reported if they are $600 or more, and federal income tax must be withheld if the proceeds total more than $5,000 or, if the proceeds do not exceed $5,000, if the recipient fails to provide a TIN.

Winnings from identical wagers (for example, two $2 bets on a particular horse to win the same race) are added together for purposes of the reporting and withholding requirements. Also, winnings from identical wagers that are not part of the payment for which the Form W-2G is being prepared are added together for purposes of withholding to determine if the total amount of proceeds from identical wagers is more than $5,000.

Enter payments of $600 or more if the payment is at least 300 times the amount of the wager.

Enter any federal income tax withheld, whether 25% regular gambling withholding or 28% backup withholding.

Enter the type of wager if other than a regular race bet, for example, Daily Double or Big Triple.

Enter the date of the winning event. This is not the date the money was paid if it was paid after the date of the race (or game).

Not applicable.

Enter the race (or game) applicable to the winning ticket.

Enter the amount of additional winnings from identical wagers.

Enter the cashier and/or window number making the winning payment.

Enter the identification numbers of the person receiving the winnings. Identification from a driver's license, social security card, or voter registration may be furnished by the person receiving the winnings.

Enter the abbreviated name of the state and your state identification number.

Enter the amount of state income tax withheld.

You must withhold federal income tax, at the rate of 25% (regular gambling withholding), from the amount of winnings less the amount wagered if the winnings less the wager exceed $5,000. If the winner of reportable gambling winnings does not provide a TIN, you must backup withhold at the rate of 28% on any such winnings that are not subject to 25% regular gambling withholding. That is, backup withholding applies if the winnings are at least $600 but not more than $5,000 and are at least 300 times the wager. Figure the 28% backup withholding on the amount of the winnings reduced, at the option of the payer, by the amount wagered.

Installment payments of $5,000 or less are subject to 25% regular gambling withholding if the total proceeds from the wager will exceed $5,000.

If payments are to be made for the life of a person (or for the lives of more than one person), and it is actuarially determined that the total proceeds from the wager are expected to exceed $5,000, such payments are subject to 25% regular gambling withholding. When a third party makes the payments, for example, an insurance company handling the winnings as an annuity, that third party must withhold.

A payment of winnings is considered made when it is paid, either actually or constructively, to the winner. Winnings are constructively paid when they are credited to, or set apart for, that person without any substantial limitation or restriction on the time, manner, or condition of payment. However, if not later than 60 days after the winner becomes entitled to the prize, the winner chooses the option of a lump sum or an annuity payable over at least 10 years, the payment of winnings is considered made when actually paid. If the winner chooses an annuity, file Form W-2G each year to report the annuity paid during that year.

Enter payments of $600 or more if the payment is at least 300 times the amount of the wager.

Enter any federal income tax withheld, whether 25% regular gambling withholding or 28% backup withholding.

Enter the type of wager (such as raffle or 50-50 drawing) or the name of the lottery (such as Instant, Big 50, Baker's Dozen, or Powerball) and the price of the wager ($.50, $1, etc.).

Enter the date of the winning transaction, such as the date of the drawing of the winning number. This might not be the date the winnings are paid.

For a state lottery, enter the ticket number or other identifying number.

Not applicable.

For other than state lotteries, enter the identification numbers of the person receiving the winnings. Identification from a driver's license, social security card, or voter registration may be furnished by the person receiving the winnings.

Enter the abbreviated name of the state and your state identification number.

Enter the amount of state income tax withheld.
 

Regular gambling withholding (25%) does not apply to winnings from bingo, keno, or slot machines. However, if the recipient of reportable gambling winnings from bingo, keno, or slot machines does not provide a TIN, you must backup withhold at the rate of 28%. That is, if the winnings are at least $1,200 from bingo or slot machines or $1,500 from keno, 28% backup withholding applies to the amount of the winnings reduced, at the option of the payer, by the amount wagered.

Enter payments of $1,200 or more from bingo or slot machines or payments of $1,500 or more from keno.

Enter any 28% backup withholding.

Enter the type of wager (that is, bingo, keno, or slot machines) and the amount of the wager.

Enter the date of the winning transaction.

Enter the ticket number, card number (and color, if applicable), machine serial number, or any other information that will help identify the winning transaction.

Not applicable.

Enter the initials of the person paying the winnings.

Enter the location of the person paying the winnings, if applicable.

Enter the identification numbers of the person receiving the winnings. Identification from a driver's license, social security card, or voter registration may be furnished by the person receiving the winnings.

Enter the abbreviated name of the state and your state identification number.

Enter the amount of state income tax withheld.