We get a lot of questions about taxes. We’re not accountants, and will always advise people to consult with an accountant familiar with gambling tax rules, but we will always do our best to offer some general guidance where we can.
Here’s an example of a question we’ve received on the subject:
Regarding taxes. If you are a California resident but win hand pays in a different state, what is the rule? For example, we won three hand pays in Reno, NV in one weekend but we’re never asked if we wanted taxes taken out. Is there an exception because it was in another state?Treiva
Thanks for the question! When it comes to taxes there are three considerations:
- Federal taxes, which is consistent wherever you are in the United States.
- The state tax requirements in the state you live
- The state tax requirements in the state you are playing
If you’re out of state, you may not be given the option to deduct state taxes for your home state. In some states, like Nevada, where there is no state income tax to speak of, you may not even be asked if you want any taxes deducted from your jackpot.
What that means is you’ll have to pay the taxes when you file with your home state, so you should be prepared to set a portion of that aside. In this way you won’t be caught unprepared and scrambling for a few extra dollars come tax time.
Keep in mind the state you gamble may have its own filing requirements. Winning a jackpot in Massachusetts, for instance, even if you’re out of state, requires you to file with Massachusetts, which means you would be filing in multiple states, and the expenses that goes along with that.
Jackpots can be an exciting experience, but it certainly creates its share of paperwork as well when it comes to tax time.
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