PA Gambling Winnings Taxation
Whenever you win from a PA online casino—be it a cash prize or a non-cash one—you’re supposed to have them taxed in PA. The system of reporting your winnings as well as the way you should fill out the IRS forms may seem confusing to a certain extent.
That is why we’ve accomplished a concise guide on how to have it all done properly.
Let’s cast a glance at all the procedures, steps, and requirements to be guided by to properly calculate your taxable winnings.
Gambling Tax Rates for the PA Residents
When you’re about to pre-calculate your winnings from online gambling within the PA borders, be advised to familiarize yourself with the two types of taxes to pay:
- Federal tax—24%, and
- State tax—3.07%.
These two taxation categories are clearly demonstrated in the calculator above, so you may see what amount of money would be deducted as a tax in case you win from an online casino in the Keystone state.
Sometimes if you don’t provide your Social Security Number (SSN) to the casinos, the federal tax size may rise up to 28%. This is another reason why it’s literally impossible to create an absolutely accurate calculator, so we’re suggesting you just pre-calculate your tax to be paid in case of winnings from casinos or race tracks.
You’d also pay attention to the fact that the matter of taxation in PA is based on your gambling status: either you’re a regular gambler or a professional one. Besides, when being taxed, it’s necessary to include if you’re married or not. That’s why it’s pretty complicated—or mostly impossible—to make up a calculator to be one hundred percent precise.
In any case, the gambling tax calculator on this page would provide you with the most accurate results possible for now.
PA Gambling Taxes Reporting
To report your winnings and along with this denote the taxes to be paid, each gambler who obtained a win from a PA online casino is supposed to receive a special form to fill in—W-2G. It’s usually sent by the organization that executes a payout (in this case, it’s a casino, for instance). As a rule, the form is directed to the gambler at the end of January with all the sums won/lost. It also comprises the amount of taxes.
Nonetheless, there are cases when it’s not a must to receive the Form W-2G. We’ll showcase the limits of winnings when you’re to fill out the form. In all other cases, you don’t have to receive the form from the casino or any other gambling facility in the Keystone state.
Consider the table below to see the sums and gambling activities to be included into Form W-2G:
|Gambling activity||Minimum winning to include to W-2G|
|Poker and poker tournaments||$5,000|
|Pari-mutuel race (all kinds)||$600|
|Bingo and slot machines||$1,200|
It means that in case you happen to win more than the threshold depicted in the table above, the casino(s) and/or any other gambling facilities will send you the Form W-2G. It will contain all of the transactions made by you, all of your winnings and losses. In such a way, you’ll report the winnings.
In addition, a copy of your Form will be mailed to IRC.
Also, if the amount of your winnings exceeds the numbers in the table, the payor would automatically withhold the taxes from you.
When reporting the winnings from an online casino in Pennsylvania, a gambler is supposed to provide a range of documents.The main purpose of the documentation in this case is to prove the real amount of winning and some possible losses not to be taxed.
Thus, the following documents should be reported:
- Form(s) W-2G
- Wagering tickets and/or payment slips that include dates, location and amount won/lost
- Canceled check(s) records
- Receipts obtained from an online gambling facility/facilities.
Loss Deduction Possible?
Yes, in compliance with the current gambling legislation, loss deduction is absolutely possible. Herein, it’s significant to considered a certain amount of factors to have this procedure granted:
- That’s your responsibility to provide the losses in the report not to have them taxed
- All of the losses to be deducted need to have proof (you need to carefully collect every receipt and casino document, whether you have obtained it online or in-person).
Let’s have it exemplified right away.
Having won $6,000 and $4,000 of it was lost means that you’re supposed to pay taxes just for $2,000—it’s your real winnings. However, to prove that you lost a certain amount of money, you’re supposed to keep all of the receipts carefully to provide them as proof to IRC.