How to Report Gambling Winnings with a Form W-2G

Do you participate in fantasy sports leagues, sometimes buy raffle tickets or occasionally play cards for money? If so, you may have ‘gambling winnings’ even if you don’t consider yourself a gambler. Any type of prize, including cash, that you win by an activity that the IRS classifies as gambling must reported on your tax return and counted as income. 

For the purposes of tax reporting, gambling activities include:

  • Lotteries
  • Raffles
  • Drawings
  • Horse races
  • Casinos
  • Wagering
  • Card games
  • Bingo, Keno and other games
  • Sports betting (including fantasy football)
  • All other types of betting, wagering or gambling

For non-cash prizes and gambling winnings, you must report the fair market value of your winnings. This includes goods and merchandise, vehicles, vacations or trips, use of rental property, real estate and anything else you receive as a result of your participation in the gambling activity.

You cannot deduct the cost of participation in the gambling activity from your winnings. Report the full amount of your winnings even if you had to pay certain expenses in order to participate (for example, the purchase price of lottery or raffle tickets, fees for fantasy sports leagues, entry fees or other expenses).

To report your gambling winnings, enter the amount of your winnings (or the fair market value of prizes you received) as Other Income on Schedule 1 of Form 1040. 

Depending on the amount you win and the organization that is hosting the gambling activity, you may or may not receive Form W-2G reporting your winnings. You must report this income on your tax return even if you do not receive Form W-2G.

If you incurred gambling losses, you may be able to include these losses as itemized deductions on your tax return. You must have well-documented written records of these losses and you cannot deduct losses that exceed the amount of your gambling income you are reporting. Nonresident aliens are usually not eligible to deduct the cost of gambling losses, unless they are residents of Canada.

Important: If you are a professional gambler, you must file Schedule C to report your gambling winnings as a self-employed person. The rules for deducting losses and expenses are different for professional gamblers.

If you are still unsure how you should report your gambling winnings, you can use the IRS’s interactive tool here