HomeNJ Gambling taxes

Am I required to pay taxes when I win money gambling in New Jersey?

The short answer is yes, you need to pay taxes when you win money gambling in New Jersey. When you receive income from any source, you are required to report it to the Internal Revenue Service when you file your returns.

Does the IRS get notified if you receive income from gambling?

The IRS are not notified unless you win an amount that exceeds certain prescribed thresholds, and they vary depending on the form of gambling that generated the win.

If you do take down a score that exceeds the threshold, IRS Form W2-G will be issued to you by the paying entity, and they will file the form with the IRS. These are the thresholds that trigger IRS notifications:

  • $600+ on bets that are a minimum of 300 times the amount of the winning wager.
  • $5000 or more in a poker tournament
  • $1500+ playing casino
  • $1200 or more playing slots, video poker, or bingo

Are you in the clear if you do not receive a W2-G?

No, you are still required to pay taxes if you turn a profit gambling. You would be violating the law if you do not report your winnings.

Are taxes withheld by NJ sportsbooks you take down a win that exceeds one of the thresholds?

For federal taxes, NJ sportsbooks be required to withhold 28% of the winnings if you win $5,000 or more.

On the state level, if you win more than $10,000 in a single jackpot, the payer will withhold 3% to comply with state laws.

What is the tax rate on online gambling winnings in New Jersey?

There is no separate rate that is reserved for winning from online gambling in New Jersey per se. You include your gambling winnings with your other income when you are filing your tax returns, and you use the tax table to determine your tax rate.

On the state level, there are seven income tax brackets, and they range from 1.4% for the lowest income earners up to 10.75% for those at the top of the scale.

What is the treatment of group gambling winnings?

This is a good question because sometimes groups of people pool their resources to buy a lottery ticket or participate in some other type of gaming activity.

Under those circumstances, the paying entity will submit Form 5754 to the IRS when they are filing the W-2G. Going forward, the IRS will know that multiple people will be responsible for individual portions of the income.

What happens if I don’t pay taxes on gambling winnings in NJ?

If you fail to pay taxes on your gambling winnings in NJ, The Internal Revenue Service will apply a Failure to Pay penalty.

For each month that you are delinquent, they will increase the amount that you owe by .05%. However, the accumulated penalty maxes out at 25%.

Is there a New Jersey lottery tax?

There are no separate gambling taxes in New Jersey, so there is no lottery tax.

But, if you win more than $10,000 in the NJ lottery in a single payout, there is automatic income tax withholding.

It is 5% for winnings between $10,001 and $500,000, and it goes up to 8% for wins that exceed $500,000.

Who benefits from New Jersey gambling tax revenue?

The Casino Revenue Fund is the major beneficiary of casino gambling and sports betting in New Jersey. Resources in the fund are used to finance many different initiatives for senior citizens and people with disabilities.

The Casino Investment Development Authority is supported as well, and the resources are used to provide housing for low and middle-income citizens.

Is there a New Jersey gambling tax calculator?

A New Jersey gambling winnings tax calculator would be impractical because there are too many variables. However, as we have explained, gambling winnings are another form of taxable income that you add to your overall income when you file.

As a result, if you use a standard income tax calculator and add the gambling winnings to the rest of your income, you will get an idea.


What are the New Jersey gambling tax thresholds?

Since there is no “New Jersey gambling tax,” there are no specific thresholds other than the ones that we have described that trigger the filing of tax forms.

How are gambling winnings reported to the IRS?

You use Schedule 1 of IRS Form 1040, and you enter the figure on Line 8 under “other income.”

Are you required to report out-of-state gambling wins?

Yes, you are required to report the income regardless of the state that it comes from. However, if taxes are withheld at the time of the win, you will not be required to pay taxes on the same income twice.

What is the revenue from gambling taxes in New Jersey?

In 2022, gambling in New Jersey generated $5.2 billion in overall revenue. The state received $526 million of this money in tax revenue.

Are gambling losses deductible when you file your taxes?

Gambling losses are deductible if you are claiming a net profit from your gambling activities. If not, you cannot claim your losses.