Form W-2G Filing Guide for Payers: Reporting Gambling Winnings & Withheld Taxes in 2025

Winning big at a casino comes with tax reporting responsibilities. All businesses involved in gambling need to know how to file W-2G.

In this blog, we’ll take a look at Form W-2G filing requirements and why it is mandatory to report it to the IRS.

Why Should a Casino or Gambling Operator File Form W-2G?

Casinos, lotteries, and other gambling operators file Form W-2G to report gambling winnings to the IRS. The form also reports if any federal income tax was withheld from these winnings.

You need to send copies of Form W-2G, Copies B and C, to the winner. The gambling winners then use this information when filing their personal tax returns on Form 1040.

Incorrect or missing out on filing W-2G for gambling winnings can be an expensive mistake. For every 30 days of missed filing, you may need to pay a penalty of $60 per form which can go up to $340 per form if filed after August 1 or not filed at all or $680 per form for intentional disregard.

If there is more than one winner, the IRS reports only if the total winnings (minus the original wager) are more than the reporting threshold. If reporting is required, W-2Gs will be issued to each winner for their share. And because there are two winners, you, the payer, need to use Form 5754 to collect each winner’s information.

Issuing Form W-2G: Types of Payments and Reporting Threshold

Reported IRS W-2G gambling winnings usually have different minimum reporting thresholds depending on the type of game.

Collecting The Winner’s Information & Withholding Rules For Form W-2G

As per Form W-2G filing requirements, there are a couple of forms that the IRS recommends filing alongside Form W-2G.

• Form W-9: This form collects TIN and other important details from the gambling winners. It only applies to U.S citizens.
• Form 5754: If there are multiple winners, the IRS used this form to gather information about the winners and files one W-2G per recipient.

Backup Withholding For W-2G

IRS W-2G gambling winnings are subject to two different types of backup withholding which are both reported in box 4.

• Regular Gambling Backup Withholding (24% or 31.58% for certain noncash payments) Some gambling payouts require you to withhold 24% or 31.8% (for non-cash payments if the payer pays for it) before issuing the winnings. This happens if the winner receives more than $5,000 from certain games like sweepstakes, lottery, horse races, etc. after subtracting the buy-in. It does not apply to bingo, slots or keno.
• Backup Withholding (24%) If the gambling winner doesn’t provide a valid TIN, or you haven’t applied regular gambling withholding, or it exceeds the $5,000 threshold, you can start the 24% backup withholding process. This applies to all gambling winnings including bingo, keno, slot machines, and poker.

Form W-2G Explained: A Step-by-Step Guide to Filing the Form

Here is a step-by-step guide on how to file W-2G and what needs to be reported in each box.

Box 1: Reportable Winnings

Add all the total winnings if it meets the minimum IRS reporting threshold ($600+ and 300× the wager for horse racing, dog racing, jai alai, sweepstakes, or lotteries, $1,200+ for bingo or slot machines, $1,500+ for keno, and $5,000+ for poker tournaments) and report the gross amount.

Box 2: Date won

Enter the date of the winning event or the day the winner was announced. It may differ from the actual date you paid out the cash.

Box 3: Type of wager

Describe the type of wager or the price of the wager, if applicable.

Box 4: Federal income tax withheld

Report 24% of gambling winnings if regular gambling withholding (for winnings that exceed the $5,000 threshold) or backup withholding (caused by invalid or missing TIN) occurred.

Box 5: Transaction

This box reports reference details related to the game. For lotteries, it is the ticket number or identifier. For bingo/slots, a card number, machine serial number can be used and for poker, use the tournament name/sponsor.

Box 6: Race

Similar to Box 5 but reports race details related to pari-mutuel betting systems like horse racing, dog racing, or jai alai.

Box 7: Winnings from identical wagers

Report the total combined winnings won from placing identical wagers for the same event.

Box 8 & 10: Cashier & Window

Enter the cashier initials and/or window number making the winning payment. This applies mostly to racing bets, keno, and slots.

Box 9: Winner’s TIN

Enter the TIN of the winner. If TIN is not provided, you can start the backup withholding process.

Box 11 & 12: Identification Numbers

Include identity verification numbers from any two of the accepted forms of identification including a driver’s license, passport, social security card, military identification card, tribal member ID, voter’s ID or completed Form W-9.

Boxes 13 to 18: State & Local

The remaining boxes are for reporting state identification number, name of the locality, state or local winnings, and state or local income tax withheld (if any).

Tip: Always leave unreported boxes blank. Do not include any numbers, even using “0.00” can increase the chances of error.

How to File W-2G Form with Tax1099?

With an IRS-approved platform like Tax1099, following W-2G e-file instructions for payers is simple.

• Sign up or Log in
  Create an account on Tax1099 website or log in to your existing account.
• Gather data from the winner
  Import the winner’s data through manual upload or, better yet, import data directly into Tax1099’s platform via bulk Excel/CSV upload, or secure API integration from casino/lottery systems.
• Real-Time TIN Matching
  Get payer TIN verification done and check if the TIN and name combination corresponds with IRS database by running a TIN match using our real-time TIN match feature.
• Apply Federal & State Withholding Rules
  Built-in calculators check for regular gambling or backup withholding rules and relevant state rules.
• Review & Validate Forms
  Review forms and automatically flag any duplicate tickets, missing codes, control-total discrepancies.
• E-File to the IRS
  Once the data has been reviewed and verified, Tax1099 will transmit the forms to the IRS.
• Distribute Recipient Copies
  You can distribute recipient copies of Form W-2G within the platform itself. We collect recipient consent and deliver copies securely through USPS or via a secure recipient portal.
• Monitor Status & Corrections
  Check your filing status through real-time dashboard. If there are any corrections to be made, you can do so by filing a new “CORRECTED” copy and retransmitting it via Tax1099.
• Archive & Reporting
  Tax1099 retains forms, reports, and other related tax documents for at least four years which can be sent to you on demand in case of internal or regulator audits.

Form W-2G Deadlines for 2025 Winnings (To be filed in 2026)

Note: Some states require an additional electronic upload on or before Mar 31. Use Tax1099 to automatically route W-2G state filings to respective agencies.

Filing Form W-2G with Real-Life Examples

• Won $1,350 on slots
  The casino needs to file Form W-2G and enter the total winning amount, i.e., $1,350 (total exceeds the $1,200 threshold), in Box 1 and send copies to the winner.
• Won $2,000 playing Keno after paying a $10 wager
  File W-2G and enter the winning amount in Box 1 since the threshold for Keno winnings was met ($1,500 or more). There is no need for regular gambling withholding
• Poker tournament winner receives $5,800
  For poker tournaments, you need to report the winning amount to the IRS only if it exceeds the $5,000 minimum reporting threshold. In this scenario, the winning amount exceeds the threshold, so, you’ll need to report the $5,800 in Box 1 of Form W-2G.
• An individual won $700 from a lottery
  Since the winning amount from the lottery exceeds $600 and is also at least 300 times the wage, you need to file W-2G and report the amount in Box 1.
• Won a payout of $900 in a horse-racing bet
  Horse racing winnings must be reported only if they exceed $600 and are at least 300 times the wager. In this scenario, the payout is $900 but it does not meet the 300 times threshold, so there is no need to file a Form W-2G.

FAQs

1. Is a corporate winner exempt the payer from filing?

No, the entity type of the winner does not matter when it comes to filing Form W-2G. You must file regardless of whether the winner is an individual or entity.

2. Does the payer aggregate multiple small slot wins to reach $1,200?

For slot winnings, each winning pull is considered separate wins. However, aggregation of identical wagers or session-based aggregation can apply in certain circumstances.

3. What if a winner refuses to provide a TIN?

If a winner refuses to provide a TIN, you can start the 24% backup withholding process and file W-2G as it is.

4. Can the payer withhold federal tax below the W-2G thresholds?

Yes, the payer can withhold federal tax even if the winnings are below the W-2G threshold amounts.

5.  How should the payer report multiple winners on one ticket?

If a payer needs to report multiple winners under one ticket, they first need to collect Form 5754 from the winners and then issue separate Forms W-2G to each winner for their portion.

6.  Are non-cash prizes reportable on W-2G by the payer?

Yes, non-cash prizes are reported on W-2G by calculating the FMV or fair-market value on the award date.

7.  How are non-resident gambling winners reported?

For nonresident aliens, the payer should collect Form W-8 from the winner and report the winnings on Form 1042-S instead of Form W-2G.

Don’t Gamble with IRS Penalties!

File Form W-2G to report gambling winnings to the IRS and stay compliant.

Start E-Filing Now