When you win a jackpot handpay at a casino, oftentimes casinos will ask you if you would like taxes to be withheld. Once you’ve made your decision, can you change your mind?
I have a question. I’m a fairly new gambler and hit my first handpay. I had them take federal taxes out. After reading a lot of articles I see I shouldn’t have done that. Is there an allowed grace period where I can change my mind and ask for the federal taxes back and just pay them at tax time.
Jason S.
We actually don’t agree that having taxes taken out for the occasional gambling winner is a problem, because it avoids a tax bill at tax time, and many gamblers think they can write off their winnings, but there are hurdles to do so that some players simply won’t clear when the time arrives.
Certainly though that’s just our opinion – some people would rather have the extra cash on hand if a surprise happens, such as a car breakdown or a family emergency. But if you just won a jackpot, there’s also the potential to set aside the money on your own, and aim to leave it alone – but still have it there in case something happens (as long as you feel confident you can replace it before the tax bill is due).
But to your specific question, once the jackpot process is complete, it’s generally a done deal – casinos have to remit the tax money to the government and file the paperwork, so allowing players to change their minds creates additional hassle and paperwork above and beyond the paperwork they really don’t want to be have to be doing in the first place. (Casinos are among those who support the raising of the jackpot amount.)
This is why we encourage all casino players to think about these things and make decisions as it relates to your own specific situation – a jackpot may be rare for many of us, but it helps to have a plan for the times they do happen. And once you make your decision and the paperwork is finalized, you can presume that is how it will stay, given the casino’s obligation to keep track of all of it and submit it to the federal government, as well as states, when state taxes are involved.
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