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Winners of a large slot machine jackpot or poker tournament often receive Form W-2G from the casino, which also sends a copy to the IRS. This is because certain large gambling winnings are reported to federal tax authorities, potentially spelling tax owed. But not every win needs to be reported, and the withholding and reporting rules differ depending on the game. Here is what players need to know when a win pops up on a Form W-2G.
Which Winnings Must Be Reported?
Not every gambling winning triggers an IRS Form W-2G. The type of gambling, the amount won, and the ratio of winnings to wager determine if a Form W-2G is required, along with when gambling tax withholding applies.
For slots, bingo, and keno, a Form W-2G is required if the winnings are $2,000 or more. After 2025, this threshold is adjusted yearly for inflation. Poker tournament winnings are reported at $2,000 or more after subtracting the buy-in.
Other wagering, including lottery tickets, horse racing and sports betting, trigger Form W-2G only if the winnings are $2,000 or more and at least 300 times the amount wagered.
So a $5 lottery ticket that wins $6,000 meets both tests and gets a W-2G, while a $10 sports bet that wins $2,500 is only 250 times the stake and does not, although that win is still taxable income. For lotteries, sports wagering, horse racing and similar wagers, the payer withholds 24% federal tax when the winnings minus the wager exceed $5,000 and meet the 300x test. On the $6,000 lottery win above, that is 24% of $5,995, or $1,438.80.
What Does Form W-2G Trigger When Delivered by the Casino?
When a casino or online platform pays out a sum that meets or exceeds the reporting threshold, they must file a Form W-2G with the IRS and send a copy to the player. The form reports the amount won, and any federal tax which may have been withheld at payout.
Slots, bingo and keno are not subject to regular gambling withholding, but 24% backup withholding can apply if the player does not give a taxpayer ID.
On the form are several spaces:
- Reportable winnings - the amount paid to you
- Federal income tax withheld, if any
- Recipient’s taxpayer ID
- Recipient’s name
The winner gives the payer a taxpayer identification number. If a Form 5754 is used, it goes to the payer and not the IRS.
What Taxpayers Should Do After Getting or Filing a W-2G
If a federal tax W-2G tax form arrives, add the winnings to your reported taxes with Form 1040.
Keep the W-2G with your other tax statements for the year; the payer also sends a copy to the IRS. The money you won is subject to federal income tax.
This is true even if tax was withheld at payout. You must report all your gambling winnings as other income on Schedule 1 of Form 1040. Gambling losses can be deducted only if you itemize on Schedule A, only up to your winnings, and from tax year 2026 only up to 90% of the losses.
The IRS expects records of winnings and losses, such as a gambling log, receipts, statements and W-2G forms.
Winnings are still reportable income even when no Form W-2G is issued.
If several people share a win, the person who receives the payment fills out Form 5754 listing each winner. For example, a group of people may share a lottery or sweepstakes prize. Form 5754 is not sent to the IRS; the payer keeps it and uses it to prepare a W-2G for each winner.
Keep your records in case of an audit. If you lost a W-2G, you can request a wage and income transcript from the IRS or ask the payer for a copy. Many casinos can also print a win/loss statement from your player card account.
What Does It Mean for Reporting Gambling Winnings?
A casino or payor reports gambling winnings to the IRS on Form W-2G when the thresholds covered are exceeded. However, all gambling wins are income, regardless of reporting. Taxpayers owe federal income tax on gambling income, and maybe state tax liability.
If you receive a Form W-2G, include the winnings as other income on your Form 1040 and keep the form with your tax records.