Instructions For Forms W-2g And 5754 - 2017 (Page 2 of 5) in pdf

Report the amount you withheld in box 4 of Form W-2G. Also

Local Tax Information

file Form 945, Annual Return of Withheld Federal Income Tax, to

Boxes 16, 17, and 18 and Copies 1 and 2 are provided for your

report all your gambling withholding.

convenience only and don't have to be completed for the IRS. If

Noncash payments. A noncash payment, such as a car in a

you withheld local income tax on a payment of gambling

sweepstakes, wagering pool or lottery, must be taken into

winnings, you may enter it in box 17 of Form W-2G. If you do,

account at its fair market value (FMV) for purposes of reporting

also complete boxes 16 and 18.

and withholding. If the FMV exceeds $5,000, after deducting the

Form 5754

price of the wager, the winnings are subject to 25% regular

gambling withholding. The tax you must withhold is computed

If the person receiving the winnings isn't the actual winner, or is a

and paid under either of the following two methods.

member of a group of winners, see

Specific Instructions for Form

1. The winner pays the withholding tax to the payer. In this

5754, later.

case, the withholding is 25% of the FMV of the noncash payment

Statements to Winners

minus the amount of the wager.

2. The payer pays the withholding tax. In this case, the

If you are required to file Form W-2G, you must also provide a

withholding is 33.33% of the FMV of the noncash payment

statement to the winner. For information about the requirement

minus the amount of the wager.

to furnish a statement to the winner, see part M in the 2017

General Instructions for Certain Information Returns. You may

If you use method 2, enter the sum of the noncash payment

furnish Copies B and C of Form W-2G to the winner.

and the withholding tax in box 1 of Form W-2G and the

withholding tax paid by the payer in box 4.

1. Horse Racing, Dog Racing, Jai Alai, and Other

Wagering Transactions Not Discussed Later

Backup Withholding

File Form W-2G for every person to whom you pay $600 or more

You may be required to withhold 28% of gambling winnings

in gambling winnings if the winnings are at least 300 times the

(including winnings from bingo, keno, slot machines, and poker

amount of the wager. If the person presenting the ticket for

tournaments) for federal income tax. This is referred to as

payment is the sole owner of the ticket, complete Form W-2G

backup withholding. You should backup withhold if:

showing the name, address, and TIN of the winner. If regular

The winner doesn't furnish a correct taxpayer identification

gambling withholding is required, the winner must sign Form

number (TIN),

W-2G, under penalties of perjury, stating that he or she is the

25% hasn't been withheld, and

sole owner and that the information listed on the form is correct.

The winnings are at least $600 and at least 300 times the

If more than one person shares in the winnings from a single

wager (or the winnings are at least $1,200 from bingo or slot

wager, see

Withholding and Forms W-2G for Multiple

Winners,

machines or $1,500 from keno or more than $5,000 from a poker

later.

tournament).

Withholding

Figure any backup withholding on the total amount of the

winnings reduced, at the option of the payer, by the amount

You must withhold federal income tax from the winnings if the

wagered. This means the total amount, not just the payments in

winnings minus the wager exceed $5,000 and the winnings are

excess of $600, $1,200, $1,500, or $5,000, is subject to backup

at least 300 times the wager. Withhold 25% of the proceeds (the

withholding.

winnings minus the wager). This is regular gambling withholding.

If the winner of reportable gambling winnings doesn't provide

Report the amount you withheld in box 4 of Form W-2G. Also

a TIN, you must backup withhold at the rate of 28% on any such

file Form 945 to report all backup withholding. You may use

winnings that aren't subject to 25% regular gambling

Form W-9, Request for Taxpayer Identification Number and

withholding. That is, backup withholding applies if the winnings

Certification, to request the TIN of the recipient.

are at least $600 but not more than $5,000 and are at least 300

times the wager. Figure backup withholding on the amount of the

See the following instructions for each type of gambling for

winnings reduced, at the option of the payer, by the amount

detailed rules on backup withholding.

wagered.

Foreign Persons

Multiple Wagers

Payments of gambling winnings to a nonresident alien individual

For multiple wagers sold on one ticket, such as the $12 box bet

or a foreign entity aren't subject to reporting or withholding on

on a Big Triple or Trifecta, the wager is considered as six $2 bets

Form W-2G. Generally, gambling winnings paid to a foreign

and not one $12 bet for purposes of computing the amount to be

person are subject to 30% withholding under sections 1441(a)

reported or withheld. Winnings on a $12 box bet must be

and 1442(a) and are reportable on Form 1042, Annual

reported if they are $600 or more, and federal income tax must

Withholding Tax Return for U.S. Source Income of Foreign

be withheld if the proceeds total more than $5,000 or, if the

Persons, and Form 1042-S, Foreign Person's U.S. Source

proceeds don't exceed $5,000, if the recipient fails to provide a

Income Subject to Withholding. Winnings of a nonresident alien

TIN.

from blackjack, baccarat, craps, roulette, big-6 wheel, or a live

dog or horse race in the United States from legal wagers initiated

outside the United States in a pari-mutuel pool aren't subject to

Identical Wagers

withholding or reporting. See Pub. 515, Withholding of Tax on

Winnings from identical wagers (for example, two $2 bets on a

Nonresident Aliens and Foreign Entities.

particular horse to win the same race) are added together for

purposes of the reporting and withholding requirements. Also,

State Tax Information

winnings from identical wagers that aren't part of the payment for

which the Form W-2G is being prepared are added together for

Boxes 13, 14, and 15 and Copies 1 and 2 are provided for your

purposes of withholding to determine if the total amount of

convenience only and don't have to be completed for the IRS. If

proceeds from identical wagers is more than $5,000.

you withheld state income tax on a payment of gambling

winnings, you may enter it in box 15 of Form W-2G. If you do,

also complete boxes 13 and 14. A state identification number

Box 1

(box 13) is assigned by each individual state.

Enter payments of $600 or more if the payment is at least 300

times the wager.

If a state tax department requires you to send it a paper copy

of Form W-2G, use Copy 1 for that purpose. Give Copy 2 to the

winner for use in filing a state income tax return.

-2-

Instructions for Forms W-2G and 5754 (2017)

Instructions For Forms W-2g And 5754 - 2017 Page 2

Related Articles

Related forms

Related Categories