By New Jersey state regulations, sports betting falls under the category of gambling. Because of this, all winnings are subject to the New Jersey Gross Income Tax. Most winnings are the responsibility of the bettor to keep a record of and report on his or her tax return, per federal and state laws. However, there are three events that will trigger federal tax reporting or withholding that will be populated by theScore.
- The first event will be a wager that pays $600 or more at odds of 300:1 or greater. Both of these criteria must be met before theScore will send the bettor a W-2G. Each completed wager will require its own W-2G form. Copies will then be sent to the IRS and to the bettor’s residence for use with his or her tax return.
- The second event will be a wager that pays $5,000 or more at odds of 300:1 or greater. The same as the first event applies, however, in this instance, the total winnings are subject to a 24% federal tax and 3% state tax that will be automatically withheld and sent to the IRS in the bettor’s name.
- The third event which will prompt an IRS investigation includes wagers that pay $50,000 or more. Regardless of odds, it will require theScore to further investigate and, if arrears are owed to the state of New Jersey, the amount will automatically be sent to the IRS in the bettor’s name.
W-2G forms can be received by contacting email@example.com or will be sent to your address in January of the following year.
theScore recommends that customers consult with a professional when preparing taxes. As mentioned previously, the bettor may need to report winnings even if a W-2G is not drafted and no taxes are immediately withheld.