Whether gambling winnings are subject to Connecticut income tax depends on whether or not the winner is a Connecticut resident (resident). If the winner is a resident of Connecticut and meets the gross income test, all gambling winnings are subject to Connecticut income tax to the extent includable in the winner’s federal adjusted gross income.
- Are Gambling Winnings Taxable In Connecticut State
- Are Gambling Winnings Taxable In Connecticut Tax
- Are Gambling Winnings Taxable In Connecticut Unemployment
- Are Gambling Winnings Taxable In Connecticut Income Tax
- Winnings from gambling can be taxable and should be reported on your tax return. You should have received a W2-G showing the full winning amount and the amount of taxes withheld. Turbo Tax asks simple income questions to make sure the correct amounts are reported.
- If the winner is a nonresident of Connecticut, gambling winnings, whether from gambling in Connecticut or from gambling outside Connecticut, are not subject to Connecticut income tax. So there's no need for a non-resident CT return. You would, however, need to include these in your MA state return.
Six Tips on Gambling Income and Losses
Whether you roll the dice, play cards or bet on the ponies, all your winnings are taxable. The IRS offers these six tax tips for the casual gambler.
- Gambling income includes winnings from lotteries, raffles, horse races and casinos. It also includes cash and the fair market value of prizes you receive, such as cars and trips.
- If you win, you may receive a Form W-2G, Certain Gambling Winnings, from the payer. The form reports the amount of your winnings to you and the IRS. The payer issues the form depending on the type of gambling, the amount of winnings, and other factors. You’ll also receive a Form W-2G if the payer withholds federal income tax from your winnings.
- You must report all your gambling winnings as income on your federal income tax return. This is true even if you do not receive a Form W-2G.
- If you’re a casual gambler, report your winnings on the “Other Income” line of your Form 1040, U. S. Individual Income Tax Return.
- You may deduct your gambling losses on Schedule A, Itemized Deductions. The deduction is limited to the amount of your winnings. You must report your winnings as income and claim your allowable losses separately. You cannot reduce your winnings by your losses and report the difference.
- You must keep accurate records of your gambling activity. This includes items such as receipts, tickets or other documentation. You should also keep a diary or similar record of your activity. Your records should show your winnings separately from your losses.
Proof:
- Bingo and similar games: Keep records of the number of games played, the cost of cards purchased, and amounts collected on winning cards.
- Slot machines: Maintain a record of the machine number and all winnings by date and time the machine was played.
- Casino table games (e.g., blackjack, craps, poker and roulette): Write down the number of the table where you played and any casino credit information.
- Racing (horses, harness, dog, etc.): Keep track of the number of races, the amounts of your wagers and the amounts you won and lost.
For residents of Connecticut, Illinois, Indiana, Kansas, Massachusetts, Michigan, North Carolina, Ohio, Rhode Island, West Virginia, and Wisconsin, beware. These states do not allow amateur gamblers to deduct their losses from their winnings. For example, if an amateur gambler in Ohio wins $50,000 and loses $50,000, they may not deduct their losses even though they technically broke even.
This is not the case if the taxpayer is a professional gambler such as a professional poker player. They may deduct gambling losses from their state income taxes but they are aggressively challenged for their status as professional.
Are Gambling Winnings Taxable In Connecticut State
So remember to consider the tax implications for gambling winnings and losses and plan accordingly based on your gambling status and the state you live in.
IRS Resources
- Publication 525, Taxable and Nontaxable Income
- Publication 529, Miscellaneous Deductions
- Tax Topic 419, Gambling Income and Expenses
- Form W-2G, Certain Gambling Winnings
IRS YouTube Videos:
- Gambling Winnings and Losses – English | Spanish | ASL
- Record Keeping – English | Spanish | ASL
IRS Podcasts:
- Gambling Winnings and Losses – English | Spanish
Follow us: @the_tax_lady | TACCT on Facebook
Are Gambling Winnings Taxable In Connecticut Tax
This information is not current and is being provided for reference purposes only
IP 2005(15)
Connecticut Income Tax Treatment of Gambling Winnings Other Than State Lottery Winnings
This publication has been superseded by IP 2008(13)
Effective Date: Upon issuance.
Statutory Authority: Conn. Gen. Stat. §§12-700 to 12-746, as amended by 2001 Conn. Pub. Acts 6, §37 (June Spec. Sess.).
Definitions:
DRS means the Department of Revenue Services.
IRS means the Internal Revenue Service.
Gambling winnings means and includes proceeds from a wager placed in a sweepstakes, wagering pool, or lottery (other than state-conducted lottery); or proceeds from a wagering transaction (including a wagering transaction in a parimutuel pool with respect to horse races, dog races, or jai alai.) Gambling winnings also include door prizes, contest prizes, and prizes from raffles or similar drawings. Gambling winnings do not include state lottery winnings.
State-conducted lottery means a lottery conducted by an agency of a state acting under authority of state law, but only if the wager is placed with the state agency conducting the lottery, or with its authorized employees or agents. State-conducted lottery includes the Connecticut Lottery conducted by the Connecticut Lottery Corporation, a public instrumentality of the State of Connecticut.
State lottery winnings means lottery winnings from a wager placed in a state-conducted lottery, where the wager is placed with the state agency conducting the lottery or with its authorized employees or agents. State lottery winnings include Connecticut Lottery winnings.
1. Are gambling winnings subject to Connecticut income tax?
Whether gambling winnings are subject to Connecticut income tax depends on whether or not the winner is a Connecticut resident (resident).
If the winner is a resident of Connecticut and meets the gross income test, all gambling winnings are subject to Connecticut income tax to the extent includable in the winner’s federal adjusted gross income.
If the winner is a part-year resident of Connecticut (part-year resident) and meets the gross income test, gambling winnings are subject to Connecticut income tax to the extent includable in the winner’s federal adjusted gross income and to the extent received during the residency portion of the winner’s taxable year.
If the winner is a nonresident of Connecticut (nonresident), gambling winnings, whether from gambling in Connecticut or from gambling outside Connecticut, are not subject to Connecticut income tax.
For information on whether an individual is a resident, nonresident, or part-year resident, see the instructions to the Connecticut income tax return for residents (Form CT-1040, Form CT-1040EZ, or Connecticut Telefile Tax Return) or the Connecticut income tax return for nonresidents or part-year residents (Form CT-1040NR/PY).
Gross income test
A winner must file a Connecticut income tax return and report his or her gambling winnings if the winner’s gross income exceeds:
- $12,000 and the winner’s filing status for Connecticut income tax purposes is Married Filing Separately;
- $12,625* and the winner’s filing status for Connecticut income tax purposes is Single;
- $19,000 and the winner’s filing status for Connecticut income tax purposes is Head of Household; or
- $24,000 and the winner’s filing status for Connecticut income tax purposes is Married Filing Jointly.
*This amount will be $12,625 for the 2006 taxable year; $12,750 for the 2007 taxable year; $13,000 for the 2008 taxable year; $13,500 for the 2009 taxable year; $14,000 for the 2010 taxable year; $14,500 for the 2011 taxable year; and $15,000 for the 2012 and subsequent taxable years.
A winner’s gross income includes all income received in the form of money, goods, property, and services that is not exempt from federal income tax and any additions required to be reported on Form CT-1040, Schedule 1. Gross income includes, but is not limited to compensation for services, including wages, fees, commissions, taxable fringe benefits, and similar items; gross income from a business; capital gains; interest and dividends; gross rental income; gambling winnings; alimony; taxable pensions and annuities; prizes and awards; income from partnerships, S corporations, estates, and trusts; individual retirement account distributions; unemployment compensation; and federally taxable Social Security benefits.
If a winner’s gross income does not exceed the applicable gross income threshold, and Connecticut income tax has been withheld from his or her gambling winnings, the Connecticut income tax will not be refunded to the winner unless he or she files a Connecticut income tax return.
2. Are gambling losses deductible?
Gambling losses are not deductible for Connecticut income tax purposes even though, in certain circumstances, they are deductible for federal income tax purposes. Connecticut income tax applies to all gambling winnings included in federal adjusted gross income.
3. May a resident or part-year resident claim a credit against his or her Connecticut income tax for income tax paid to another state on gambling winnings?
No. Neither a resident nor part-year resident is eligible to claim a credit against his or her Connecticut income tax for income tax paid to another state on gambling winnings.
4. Will Connecticut income tax be withheld from gambling winnings?
Connecticut income tax will be withheld from a payment of gambling winnings if all of the following conditions are met:
- The payer maintains an office or transacts business in Connecticut;
- The payment is subject to federal income tax withholding; and
- The payment is made to a resident or to someone receiving the payment on behalf of a resident.
For example, a dog track located within Connecticut must withhold Connecticut income tax from a payment of winnings only if the payment is subject to federal income tax withholding and the payment is made to a resident or to someone receiving the payment on behalf of a resident. Also, if a payer of gambling winnings is a nonprofit organization maintaining an office or carrying on activities in Connecticut, the nonprofit organization must withhold Connecticut income tax from a payment of gambling winnings if it is required to withhold federal income tax from the payment and the payment is made to a resident or to someone receiving the payment on behalf of a resident.
The fact that federal or Connecticut income tax may have been withheld from a winner’s winnings does not excuse the winner from filing a federal income tax return or a Connecticut income tax return.
Connecticut income tax will not be withheld from gambling winnings if the payer does not maintain an office or transact business in Connecticut if the payment is not subject to federal income tax withholding or if the payment is not made to a resident or someone receiving the payment on behalf of a resident.
5. Is a winner required to provide his or her name, address, and Social Security Number (SSN) to the payer?
Yes. A winner is required by federal law to complete federal Form W-2G, Certain Gambling Winnings, by providing his or her name, address, and SSN, and by signing the declaration of the form, under penalties of perjury, that the information provided is correct.
6. How is a winner’s residency status determined?
A payer of gambling winnings determines the residency status of a winner based upon the address furnished and the identification provided by the winner at the time federal Form W-2G is completed. The payer must additionally require two forms of identification from the winner, including but not limited to, a Social Security card or a driver’s license.
7. What if there is more than one winner?
If more than one person is entitled to a share of the winnings, one federal Form 5754, Statement by Person(s) Receiving Gambling Winnings, must be completed identifying each of the persons entitled to a share. Federal Form 5754 is also used when the recipient is not a person entitled to a share. This form will list the name, address, and taxpayer identification number of all persons entitled to any payment of the winnings. The form must be signed, under penalties of perjury, by the person (or persons) receiving the winnings. The payer uses the information on federal Form 5754 to prepare federal Form W-2G for each of the winners. A copy of federal Form 5754 must be retained by the payer. A copy of federal Form 5754 need not be submitted to DRS, but must be made available upon request. If the person receiving the winnings is unable to properly identify any of the persons entitled to a share of the winnings or their state of residence, the amount of the winnings applicable to the other person is considered to have been won by a resident of Connecticut and Connecticut income tax must be deducted and withheld from such winnings.
8. Will payments of gambling winnings be reported to DRS?
If a payer of gambling winnings maintains an office or transacts business in Connecticut, payments of gambling winnings are required to be reported to DRS if the payer is required to report the payment to the IRS and the payment is made to a resident or to someone receiving the payment on behalf of a resident.
The fact that a payer may not have been required to report a payment of gambling winnings to the IRS does not excuse the winner from reporting those winnings for federal and Connecticut income tax purposes.
While payers of gambling winnings not maintaining an office or transacting business in Connecticut are not required to report payments to DRS, the IRS provides information about gambling winnings of Connecticut residents to DRS.
Effect on Other Documents:Informational Publication 2001(29), Connecticut Income Tax Treatment of Gambling Winnings Other Than State Lottery Winnings, is modified and superseded and may not be relied upon on or after the date of issuance of this Informational Publication.
Effect of This Document: An Informational Publication issued by DRS addresses frequently-asked questions about a current position, policy, or practice, usually in a less technical question and answer format.
For Further Information: Call DRS during business hours, Monday through Friday:
- 1-800-382-9463 (in-state), or
- 860-297-5962 (from anywhere)
TTY, TDD, and Text Telephone users only may transmit inquiries anytime by calling 860-297-4911.
Are Gambling Winnings Taxable In Connecticut Unemployment
Forms and Publications: Forms and publications are available anytime by:
- Internet: Preview and download forms and publications from the DRS Web site.
- Telephone: Call 860-297-4753 (from anywhere), or 1-800-382-9463 (in-state) and select Option 2 from a touch-tone phone.
Are Gambling Winnings Taxable In Connecticut Income Tax
IP 2005(15)
Income Tax
Gambling Winnings
Issued: 10/30/2005