Does Indiana Tax Gambling Winnings

 
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November 01, 2017

Indiana Sales Tax

Have you recently won some cash at the casino or racetrack? Congratulations! While it is very exciting, keep in mind there are tax implications and you should be prepared to pay federal, state and local income taxes on the winnings.

Does Indiana Tax Gambling Winnings Tax

  1. Your gambling winnings are generally subject to a flat 24% tax. However, for the following sources listed below, gambling winnings over $5,000 will be subject to income tax withholding: Any sweepstakes, lottery, or wagering pool (this can include payments made to the winner (s) of poker tournaments).
  2. Depends on the state where you live. Residents of Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming do not pay taxes on any gambling winnings because none has a state income tax. Residents of New Hampshire and Tennessee are not taxed on gambling winnings because those two states only tax investment income and interest.
Does

You can anticipate that the casino or other party that provides the payout to give or send you a Form W-2G. The information reported on this federal form includes the date you won, the reportable winnings, type of wager, federal and state taxes withheld and other details about the transaction.

Indiana taxesTax

You will file a W-2G if you won money from any of the following sources (please note, the list is not exhaustive):

Tax
  • Horse/dog track or off track betting
  • Jai-alai
  • State-conducted lottery
  • Keno • Bingo
  • Slot machines
  • Poker winnings
  • Any other type of gambling winnings

Keep in mind, even if you win money at a charity event that is hosted by a church or other type of non-profit organization, those winnings are taxable. If you paid money to participate in the event, such as purchased cards for a game of bingo at your church, you cannot claim the funds you spent as a donation to a non-profit organization when you file your income taxes.

Does Indiana Tax Gambling Winnings Money

If you find yourself on the losing end of a game of chance, you may wonder if you can report a gambling loss on your tax return. Generally, it is not allowable, but there are exceptions. It is advisable that you consult with a tax professional if you find yourself in such a situation or have questions.

For rules, laws and other information pertaining to gaming in Indiana, visit the Indiana Gaming Commission website at http://www.in.gov/igc/.

Gambling

Indiana Department Of Revenue

If you are an Illinois resident, and you favor the Indianariverboats, you will probably end up with some new tax filingheadaches. In early 2003, Indiana announced that gambling winnings ofnon-residents at Indiana based establishments are subject to Indianataxes. If you are an Illinois resident this means you will have anIndiana tax filing and a more complicated Illinois tax return. For yourIndiana winnings you will have to report the income on an Indianaincome tax return, and on your Illinois return you can claim a creditfor the Indiana taxes limited to the effective Illinois tax rates.While there are a number of forms and computations involved, the endresult is usually paying a 3.4% Indiana income tax and claiming acredit up to 3% on your Illinois return.
Not filing an Indiana income tax return on your Indiana gamblingwinnings is not a good alternative. Gambling winnings of $1,200 or moreare reported to the IRS, and this information is shared with thestates. The reporting threshold for racetrack winnings is only $600. Ifyou are caught by Indiana you will be subject to interest andpenalties. Also, by the time Indiana assesses you it may be too late tofile a refund claim in Illinois. For both Illinois and Indiana, thereis a three-year statute of limitations for refund claims. However,there is no statute of limitations on assessments if an Indiana taxreturn was never filed, and you may want to file Indiana returns forprior years now as the Indiana Department of Revenue is aggressivelygoing after non-filers from Illinois for prior years.
Indiana's new withholding rules complicate matters. Starting with July2002, Indiana requires withholding income taxes on Indiana gamblingwinnings exceeding $2,500. Unfortunately, you cannot claim the Indianaincome tax withholding on your Illinois tax return as there is noreciprocal agreement between Indiana and Illinois. You will have tofile an Indiana income tax return and then claim a credit for theIndiana taxes on your Illinois income tax return.

Does Indiana Tax Gambling Winnings Without

Not filing an Indiana income tax return on your Indiana gambling winnings is not a good alternative. Gambling winnings of $1,200 or more are reported to the IRS, and this information is shared with the states. The reporting threshold for racetrack winnings is only $600. If you are caught by Indiana you will be subject to interest and penalties. However, if you are a professional gambler and are allowed to claim gambling losses on your federal business schedule (probably federal Schedule C), then the losses are included in federal AGI, and you'll get full credit for it on the Indiana tax return.