Gambling operators, state lotteries, racetracks, and other payers are required to report certain gambling winnings to the IRS and to the winner using Form W-2G. This guide explains when reporting is required, how withholding works, what information you need, and the steps to file accurately for the 2024 tax year (filed in 2025).
What is W-2G and who must file?
W-2G is the IRS information return for specific gambling winnings and any federal income tax withheld from those winnings. Payers include casinos, racetracks, sportsbooks, state lotteries, card rooms, and online gaming operators with U.S. operations. If a payout meets IRS reporting thresholds, the payer must issue a statement to the winner and file with the IRS.
When are winnings reportable?
Reporting thresholds depend on the type of wager. If a payout meets or exceeds the threshold below, you generally must issue a statement to the winner and file with the IRS:
- Slots and bingo: $1,200 or more.
- Keno: $1,500 or more (amount reduced by the cost of the wager).
- Poker tournaments: More than $5,000 (net of buy-in).
- Lotteries, raffles, sweepstakes, wagering pools, and other wagering: $600 or more and at least 300 times the amount wagered.
For pari-mutuel wagering (for example, horse racing), “identical wagers” on the same event may be aggregated to determine the threshold. Keep documentation for how the threshold was met.
When do you withhold federal income tax?
There are two types of withholding you may need to apply:
- Regular gambling withholding (24%): Applies to proceeds from lotteries, raffles, sweepstakes, and wagering pools when the proceeds are more than $5,000. Proceeds generally equal winnings minus the amount of the wager. Regular withholding does not apply to slots, bingo, and keno.
- Backup withholding (24%): Applies when the winner fails to furnish a taxpayer identification number (TIN) for any reportable gambling winnings, including slots, bingo, keno, and poker tournaments.
Withholding may also apply to non-cash prizes based on their fair market value. For nonresident alien winners, different rules apply (typically 30% withholding under chapter 3 and reporting on Form 1042-S, subject to tax treaty exemptions).
2025 deadlines and how to file
The deadlines for Form W-2G are typically:
- Furnish Forms – January 31
- Paper file – February 28
- E-file with the IRS – March 31
However, if these dates fall on a weekend or federal holiday, then they are generally the next business day.
Electronic filing is required if you have 10 or more total information returns for the year (aggregated across forms such as W-2, 1099, and others). E-file using the IRIS or an authorized IRS e-file vendor.
You may request a 30-day filing extension using Form 8809 before the due date. Extensions generally do not extend the deadline to furnish statements to winners.
Information you need to collect
Gather and verify the following at the time of payout:
- Winner’s legal name, address, and TIN (use Form W-9 for U.S. persons).
- Type of wager and date won.
- Amount of winnings, amount of the wager (where relevant), and net proceeds.
- Amount of federal and state income tax withheld, if any.
- Details needed to classify the transaction (for example, lottery vs. wagering pool).
Consider using the IRS TIN Matching program to reduce mismatches and avoid backup withholding and penalty exposure.
How to complete and deliver the statement
The winner’s statement should clearly show:
- Reportable winnings.
- Federal income tax withheld.
- Type of wager and date won.
- Payer and winner identification information.
- State information if you withheld state tax or are required to report at the state level.
Provide the winner their copy by the applicable deadline. File the information return with the IRS by the applicable filing deadline. Maintain records of identification and calculations for at least four years.
Practical examples
- Slots: A patron wins $1,300 on a slot machine. Reporting is required because it exceeds $1,200. No regular federal withholding applies. If the patron declines to provide a TIN, you must backup withhold 24% of $1,300.
- State lottery ticket: A ticket pays $6,500 on a $10 wager. Reporting is required. Regular withholding applies because proceeds exceed $5,000. Proceeds are $6,500 − $10 = $6,490; withhold 24% of $6,490.
- Poker tournament: Player buys in for $500 and receives a $6,200 payout. Net winnings are $5,700, so reporting is required. Regular withholding does not apply to poker tournaments, but backup withholding at 24% is required if no TIN is provided.
- Keno: A $1,600 keno win with a $5 ticket. Reporting is required because the reportable amount (winnings minus wager) is $1,595 and exceeds $1,500. No regular withholding applies; backup withholding applies if no TIN.
State requirements
States may require separate reporting, their own withholding, or specific statements for gambling winnings. Check your state’s revenue department for thresholds, forms, and due dates. Some states accept federal data feeds while others require direct filing.
Common mistakes to avoid
- Using the wrong threshold for the type of wager (for example, applying the $600 rule to slots).
- Failing to net the wager when required (lotteries, wagering pools) for proceeds and withholding calculations.
- Not applying backup withholding when no TIN is provided.
- Reporting nonresident alien winners on the wrong form (use Form 1042-S in most cases).
- Missing the e-file requirement once you reach 10 total information returns.
- Inaccurate payer or winner TINs due to lack of TIN verification.
Form W-2G Step-by-step filing checklist
- Determine if the payout is reportable based on the wager type and threshold.
- Collect winner identification and TIN (request Form W-9 as needed).
- Calculate proceeds and determine whether regular or backup withholding applies.
- Withhold and remit federal tax when required; consider state withholding rules.
- Prepare the winner’s W-2G statement and deliver by the due date.
- Submit your W-2G filing with the IRS by the applicable deadline (paper or e-file).
- Retain records supporting identification, calculations, and filing confirmations.
Corrections and amended filings
If you discover an error after furnishing or filing, issue a corrected statement to the winner and file a corrected return with the IRS. Mark the return as “Corrected” and include the accurate amounts and information. Correct promptly to minimize penalties.
Security and privacy considerations
Because you collect sensitive personal information and may store identity documents, implement strong access controls, encryption, and retention policies. Limit who can view TINs and store only what is necessary to meet compliance and audit needs.
Form W-2G Frequently asked questions
Do winners owe tax even if no statement is issued?
Yes. All gambling winnings are taxable to the winner. Your reporting obligations are based on thresholds, but the winner must report all winnings on their tax return.
What if multiple tickets were placed on the same race?
For pari-mutuel pools, identical wagers on the same event can be aggregated for threshold and proceeds calculations. Keep documentation of all tickets considered.
Are non-cash prizes reportable?
Yes, if their fair market value meets the threshold for the wager type. Withholding, when required, is based on fair market value and may need to be satisfied in cash.
Key takeaways
- Know the Form W-2G thresholds by wager type and whether to net the wager to compute proceeds.
- Apply regular 24% withholding when required and backup withholding if no TIN is provided.
- Meet 2025 deadlines: furnish by January 31; file by February 28 (paper) or March 31 (e-file).
- Use TIN verification to reduce errors and penalties.
- Consult the latest IRS Instructions and Publication 3079 for gaming industry guidance.
This article provides general information about payer reporting for gambling winnings. Always review the latest IRS Instructions for Form W-2G and related publications, and consult a qualified tax professional for your specific situation.
Target keyword usage: This guide explains how to file Form W-2G, when Form W-2G is required, and how withholding interacts with Form W-2G reporting for 2025. Proper use of Form W-2G helps payers meet federal and state compliance requirements.
BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.
About Author
