This form will also be issued when there’s a win of $600, which is also equal to or greater than 300x the bet, but no tax will be withheld until the $5,000 threshold is reached. When the payer withholds a percentage of a gambler’s winnings to pay federal income tax, they will issue the gambler with Form W-2G, which shows how much income tax has been withheld.

Some states will also withhold money for state taxes when also withholding money for federal taxes. If the 24% is more than you should have paid, you’ll receive a rebate. If this is the case, you’ll be required to pay extra. However, you might find that this is not enough when the end of the year comes around, as you’ve earned more than $164,925. Sportsbooks are expected to withhold 24% of net winnings when there’s a substantial payout, which is classed as over $5,000 with winnings are at least 300x your wager. The amount of tax you pay to a state usually depends on your overall annual earnings and marital status. The state where the bet was placed usually charges the tax, not the state where the gambler resides. Individual states will also usually tax winnings themselves, although the amount they tax is much less than that charged by the federal government.

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