In a landmark ruling, New Jersey gambling regulators have said that gambling winnings from bets placed on football and other professional sports events are taxable income.
The decision means that gamblers will have to pay a tax rate of 8 percent on gambling winnings in the state.
“It’s going to affect some people, but it shouldn’t be a big impact,” said Jay Kornegay, the sportsbook director for Westgate Las Vegas casino resort. “You have to be gambling at a place where they withhold taxes.”
New Jersey’s gambling winnings tax rate
New Jersey’s gambling winnings tax rate is among the highest in the United States at 8 percent, behind only Pennsylvania and Washington State, which levy gambling winning tax of 13 percent and 10 percent respectively. New York remains one of five states that doesn’t impose a gambling-winning tax on residents or non-residents alike.
“It’s similar to somebody who makes money through salaries and dividends,” said Paul Josephson, an attorney with Lowenstein Sandler PC whose clients include gambling industry operators. “Different people get different tax treatment on how they make their income.”
Josephson said that New Jersey gambling operators were not permitted to withhold gambling taxes on gambling wins, but the new ruling means visitors who won at gambling tables and machines will be responsible for filing a tax return. “It puts another aspect of gambling out there,” he said. “Now there’s this additional thing to think about.”
The new ruling comes on the heels of a landmark US Supreme Court gambling winnings decision earlier this month. In Murphy vs. NCAA, the court held that PASPA, which prohibits states from authorizing gambling schemes that are contrary to state law, violated anti-commandeering rules established in Printz v. the United States.
PASPA is similar to New York’s 1992 gambling law called the Bradley Act after former Gov. Mario Cuomo pushed for statewide gambling bans at race tracks and Off-Track Betting Corp.(OTB) parlors. The ban made any gambling scheme outside of gambling permitted by Indian tribes legal only if authorized by a constitutional amendment approved by voters statewide or by referendum authorized by state lawmakers.
Neither method has ever been used.
New Jersey gambling regulators assume that gambling winnings will be taxable income. However, gambling losses are not deductible in New York State because gambling is illegal with some exceptions for OTB and charity bingo games.(source: gambling.com)
Gambling winnings in New York are generally subject to income tax, but there are several exceptions. Gambling winnings from gambling establishments located outside of the U.S. are exempt from the gambling winning tax, as are gambling wins if they do not exceed $600 per person for any single wager or slot play transaction.(source: lottery.ny.gov)
Regarding taxation on gambling in New York, for non-residents of New York state who won money gambling in New York gambling establishments, gambling winnings are subject to taxation in the state of residency, if different than the state of New York. Gambling losses are not deductible.(source: gambling.com)
Since gambling is illegal in New York except for certain Native American tribes, there is no official gambling winnings tax rate; however, they do appear on income tax returns as taxable income. Gambling losses may be claimed as an itemized deduction on Schedule A (Form 1040), but only up to the amount of gambling wins reported on that return.(source: irs.gov)
In a landmark ruling, New Jersey gambling regulators have said that gambling winnings are subject to gambling income tax. Gambling losses are no longer deductible. Non-residents gambling in New Jersey must file a return if their gambling wins exceed $600/single wager or slot play transaction.(source: gambling.com)
Connecticut also does not have an official gambling winning tax rate, but gambling winnings are included as taxable income on the Connecticut state income tax form 1040.(source: irs.gov)
Pennsylvania is one of five states that doesn’t impose a gambling-winning tax.
Pennsylvania is one of five states that doesn’t impose a gambling-winning tax on residents or non-residents alike, along with Nevada, Texas, and Washington State.(source: gambling.org)
Gambling losses are not deductible in New York State because gambling is illegal there except for certain Native American tribes. For gambling winnings in New York, gambling winnings are subject to taxation in the state of residency if it is different than the state of New York. New Jersey gambling regulators assume gambling wins are taxable income, but gambling losses are not deductible. (source: gambling.com)
New Jersey taxed gambling wins at 8.25 percent
New Jersey taxed gambling wins at 8.25 percent, but there was no withholding on gambling losses. Visitors who won at gambling tables and machines will be responsible for filing a tax return and paying taxes owed on their winnings.(source: njspotlight.com).
The new ruling comes on the heels of a landmark US Supreme Court gambling winnings decision earlier this month. In Murphy vs. NCAA, the court held that a 1992 federal law called the Professional and Amateur Sports Protection Act, which effectively banned gambling on sports in most states outside of Nevada was unconstitutional. The ruling opened the door for gambling on sports everywhere except New York.
New Jersey gambling regulators assume gambling winnings will be taxable income. However, gambling losses are not deductible in New York State because gambling is illegal without exceptions such as OTB and charity bingo games.(source: gambling.com)
Regarding taxation on gambling in New York, for non-residents of New York state who won money gambling in New York gambling establishments, gambling winnings are subject to taxation in the state of residency, if different than the state of New York. Gambling losses are not deductible.(source: gambling.com)
