Certain kinds of winnings from gambling are taxable and get reported on IRS Form W-2G. Whoever issues this form must fill it out and send it to you and the IRS. Looking ahead, the One Big Beautiful Bill Act (OBBB) has reduced the percentage of gambling losses that you’re able to deduct for tax year 2026 (the return you’ll file in 2027).
Continue reading to find out how to report gambling winnings on your tax return.
Do you pay taxes on gambling winnings?
Yes, you’re required to report and pay federal income tax on all gambling winnings. This applies to cash winnings and the fair market value of non-cash prizes, such as trips, merchandise, and raffles.
You shouldn’t combine your winnings and losses into a single number. Instead, you’ll report each one separately. It’s also important to know that you can’t reduce your winnings by the amount you wagered. For example, if you bet $50 and win $250, you’ll need to report the full $250 as your winnings.
Gambling winnings must be reported on your tax return as “other income” on your Form 1040.
What is Form W-2G and how do you get it?
Form W-2G is the tax document casinos or gambling establishments must use to report your winnings and any federal tax withholdings. The gambling establishment is responsible for filling out and submitting Form W-2G to the IRS. They will also send you a copy of the form to report on your tax return.
Here’s the type of information you’ll find on a Form W-2G:
- Box 1: Your gross winnings from gambling
- Box 2: The date you won
- Box 3: The type of wager
- Box 4: The amount of federal tax withheld (24% is typical).
- Box 5: Transaction or ticket number
- Box 7: Combined winnings from identical wagers for the same event
- Box 9: Your taxpayer ID number (typically your SSN).
- Boxes 11-12: Identification numbers from two forms of identification (e.g. driver’s license or passport)
- Boxes 13-18: State/local tax withheld and winnings.
Whether or not you are issued a W-2G primarily depends on the amount of winnings and the gambling type. You can expect a W-2G for:
- Slot machine and bingo winnings of $1,200
- Keno winnings equal to or greater than $1,500.
- Poker tournament winnings exceeding $5,000
- Any lottery winnings or sweepstakes winnings over $600
- Sports and fantasy sports betting if you win $600 or more and the payout is at least 300 times the amount of the wager.
- Any other gambling activity in which you won 300 times the wager
If you haven’t received your W-2G or you lost it, contact the gambling institution to get it reissued or contact the IRS directly since they should also have a copy.
Penalties for not reporting gambling winnings
The IRS considers gambling winnings (over a certain amount) taxable income, so if you don’t report them, you might face penalties of up to 20% for underpayment of tax, interest on the tax owed, and potentially an IRS audit of your tax return.
Keep in mind, casinos and gambling establishments must send out Form W-2 G to you and the IRS so they have records of your winnings. A mismatch between what you report and what they have could trigger an additional review of your tax return. If you repeatedly neglect to report your gambling income, it could escalate to more serious penalties.
To keep everything straightforward and stress-free, accurately report all your gambling winnings and losses on your tax returns. You should also keep records of your gambling activities to help you stay compliant and avoid any surprises during tax season.
Can taxes be withheld from gambling winnings?
Yes. If your winnings exceed $5,000, the IRS requires part of the payout to be withheld for taxes. Because withholding isn’t automatic, you’ll need to give the payer—such as a casino, sportsbook, or lottery—your SSN or Taxpayer Identification Number (TIN) by completing Form W‑9.
Typically, gambling establishments withhold a standard 24%. If the payer doesn’t have your SSN on file, they may withhold up to 31% of your winnings. This “backup withholding” acts as a safeguard to ensure the proper taxes are collected when the issuer doesn’t have your SSN.
How to report gambling winnings without Form W-2G
If you don’t have a W-2G, you can still report your gambling winnings by providing the date, location, amount won, and the type of gambling involved. If you have receipts or ticket stubs, they can be used to verify your reported income or losses.
This is when good record-keeping practices can benefit you. Make it a habit to keep detailed records of all your gambling transactions, winnings, and losses.
Are gambling losses tax deductible?
Yes, losses can be deducted – although you won’t receive Form W-2G outlining losses. Keep records of your wagers and losses. They will be reported on Form 1040, Schedule A as “Other Itemized Deductions.” You can’t deduct losses if you aren’t reporting winnings. You have to report your winnings and your losses separately. And the amount of money lost that you deduct can’t be more than the amount of winnings reported on your tax return.
For example, if you have winnings of $1,000 and losses of $2000. You can only claim $1,000 for your losses.
How do I deduct gambling losses without itemizing?
You can’t deduct gambling losses without itemizing your deductions. The IRS only allows these losses to be written off if you choose to itemize instead of taking the standard deduction. That means there’s no alternative method or above‑the‑line deduction available. Your losses can only be claimed on Schedule A, and only up to the amount of your reported gambling winnings.
