What triggers W-2G forms for gambling taxes
Last update: April 2023
When you hit certain jackpots, the casino will give you a W-2G form. It's commonly (and wrongly) believed that you're supposed to report the W-2G amounts on your tax return as your gambling income. You're not. The way you actually deal with these forms is covered in my detailed article about how to figure gambling taxes. What we'll cover in this article is how you get issued the W-2G in the first place.
The casino will give you a W-2G form for certain jackpots:
- $1200 or more on a slot (or other electronic) machine (which is why many slot machines have a top jackpot of $1199, so if you hit, neither you nor the casino have to hassle with a W-2G)
- $1500 or more in keno
- More than $5000 from a poker tournament
- For all other games (including horse racing), $600 or more, when the winnings are at least 300 times the bet (IRS)
When figuring these threshold amounts, sometimes you
subtract the bet from the win, and sometimes you don't:
- For slot jackpots, you don't subtract the bet from the win. That is, a hit of $1200 counts as a W-2G event whether you bet $1, $5, or $1200 on the winning spin. So yes, it's kind of ridiculous: You bet $1200 on a high limit machine, hit for $1200, meaning you've just broken even, but you'll get a W-2 anyway.
- For keno and poker tournaments, you do subtract the bet from the win. If you buy a $1 keno ticket and hit for $1200, that's considered only a $1199 win, so you don't get a W-2G. For poker tournaments, the win is reduced by the buy-in amount.
- For all other games, it's up to you whether you subtract
the bet from the win.
(IRS)
You get the W-2G only for single wins that pass the threshold. If you have many small wins that total more than $1200, you don't get the form.
When giving you a W-2G, the casino will ask you for your social security number, so don't freak out when they do. They'll send a copy to the IRS, too.
If you have a bunch of $1200+ wins in a day, the casino can choose to report all the wins on a single form, rather than on a bunch of separate forms. The casino can also choose to base this on a "gaming day" rather than a calendar day, since many casinos start their financial day between 3:00-6:00 a.m. rather than at midnight.
In certain rare instances, the casino will deduct 24% for withholding (just like the withholding taken from your paycheck, which applies towards the taxes you owe on your 1040).
If you buy or cash more than $10,000 in chips in one day, the casino will do a CTR (Cash Transaction Report) form for the IRS (not for you).
1099 forms
Most gamblers won't get these. The casino
will issue you a 1099 form if you win something without making a
specific bet, such as a bad beat jackpot in poker, or winning a
prize in a drawing that you entered for free (by earning tickets
playing some other game). Add any 1099 wins to the total of
your session wins for the year, as per above.