IRS rolls out new gambling regs
Do you enjoy wagering at casinos and participating in other games of chance? The IRS requires you to pay tax on your fair share of winnings as reported by the “house.”
Alert: The IRS has issued new final reporting regulations that address the rules for reporting payments from bingo, keno and slot machine winnings. (IRS Reg. 1.6014-10, 12/29/16)
Specifically, the IRS simplified and updated existing rules for providing required information.
Here’s the whole story: For starters, you must pay tax on gambling winnings, but you can offset the tax by substantiating losses up to the amount of the winnings. To keep track of winning amounts, the IRS generally requires reporting for $600 or more in a year, but prior regulations established higher amounts of $1,200 for bingo games and slot machines and $1,500 from keno. These payments are reported on Form W-2G, Certain Gambling Winnings.
Among other requirements, Form W-2G must include the name, address and taxpayer identification number of the recipient and a general description of two forms of identification used to verify this information.
Following up on proposed regulations issued in 2015, the new final regs contain the following clarifications:
- Reportable winnings for bingo means winnings of $1,200 or more from one bingo game without reduction for the amount wagered. All winnings received from all wagers made during one bingo game are combined.
- Reportable winnings for keno means winnings of $1,500 or more from one keno game reduced by the amount wagered on the same keno game. All winnings received from all wagers made during one keno game are combined.
- Reportable winnings for slot machines means winnings of $1,200 or more from one slot machine play without reduction for the amount wagered.
Tip: The new final regs are generally effective for gambling winnings from bingo, keno and slot machines reported after 2016.