Looking For Some Answers On Taxing Of Poker Winnings

[rcgs59 15]

Ok just looking for a few answers please and ty, I am sure there is an old thread some where but wondering if there are any new developments.

 

Why are the taxing of poker winnings not uniformed across the States?

 

 

In Vegas and in CO I know you are not taxed until the Federal minimum is reached why is it different in NY.

 

 

Here is the general guideline:Rules for Tax Reports and Withholdings on Winnings

 

•Slot machines and bingo: Payouts of $1,200 or more are reported to the IRS, but there is no withholding taken out.

•Keno: Similar to slot machines, but the amount won must be at least $1,500.

•State lotteries and sweepstakes: Withholding is taken out of all winnings of more than $5,000.

•Parimutuel pools, including horse and dog races: Subject to withholding, but only if the winnings are both more than $5,000 and at least 300 times as large as the amount bet.

 

So If I win even $1.00 I am taxed and 30% are with held in NY

makes no sense unless the Federal Mim is reached.

 

How do we change it to make it Uniformed.

[DJ Vu 176]

I don't have any specific knowledge of this, but I would guess that the withholdings in NY are for state income taxes, not Federal.

[JubilantLankyLad 1,957]

All taxes should be in Dress Whites, effective immediately.

[GWCGWC 83]

Rose, I think the casino's only report because they are forced to report winnings over xxxx amount. I'm pretty sure the with-holdings are voluntary and you can request the form to get the full amount.

 

All winnings are taxable in the U.S. Just because it's under the amount the casino is required to report doesn't mean you aren't liable for paying taxes on the winnings.

 

Talk to your account.

 

Pay your taxes.

[rcgs59 15]

thx Gary it's just weird, I never had taxes taken out in Vegas under 5k yet Ny even if it's $1.00 they will take 30 % , yet slot winnings they don't touch it till 1200.

 

I got the paper work for getting it back , but it's the pain in the ass of getting it done. Just make it the same all over. That makes sense

 

 

Glad Canada doesn't tax lottery or casinos wins lol

[DJ Vu 176]

Just make it the same all over. That makes sense

 

There are Federal income taxes and state income taxes. You're not going to have the same rules for state income taxes. Some states don't even have any income taxes.

[rcgs59 15]

http://www.notedpokerauthority.com/news/irs-increases-withholding-requirements-for-poker-tournaments.html

 

 

 

RS Increases Withholding Requirements for Poker Tournaments

Posted on Mon Sep 17, 2007 01:21:20 PM

Filed under News, Playing for a Living, Poker and the Law

[rcgs59 15]

http://taxdood.com/?s=poker+taxing

The Poker Situation

Poker, however, provides an interesting possible counterpoint. Again, for most people, and certainly for the casual player, there will be a presumption against taxation of poker winnings as they will not be from a business. But what of the professional^[7] poker player? Although there is no remotely recent case holding that a professional player is taxable on her profits from poker, it’s possible to see how such a case could be made by the government. Among other indicia, if a resident in Canada is successful in poker with solid and consistent profits from the activity over a number of taxation years, has no material income-earning occupation other than playing poker (or related to playing poker – sponsorships, for example), and is a student of the game and works at learning and improving her game, then it seems likely that that resident would be classified as carrying on the business of being a professional poker player and be taxable on her profits from the game.

One difficulty is that making an actual determination like this would be extremely difficult. Where is the tipping point at which a taxpayer makes the leap from an amateur player to a professional sufficiently devoted to poker, consistently winning, and making good money? These things are much easier to nail down in theory than in practice. This is part of the reason that the Canada Revenue Agency is reluctant to assess people as having income from carrying on the business of playing poker; if business profits are taxable, then business losses can be also used to reduce income from that business and (in the case of individuals) from other businesses or from employment. If the government gets overly aggressive with taxing poker players, it could eventually find that it results in a net drain on Canada’s tax revenues.

How could the tax laws in Canada apply in a land-based poker tournament being held in Canada pursuant to applicable provincial laws and regulations? This is an interesting question. An amateur player would likely not be taxable, but let’s assume that a professional poker player who is resident in Canada wins such a tournament. Again, based on an analysis that the player has the hallmarks of a professional poker player discussed above, those winnings would likely be included in the player’s income from a business.

What of a United States resident professional player winning such a tournament? Non-residents are generally taxable on income earned from carrying on a business in Canada, and “carrying on business” in this context is broadly defined.^[8] However, the Canada-US Income Tax Convention (the “Treaty”) provides that where a US resident is carrying on business in Canada, the business profits are taxable by Canada only if the US resident is carrying on business through a permanent establishment. Permanent establishment in the Convention is an inclusive definition, which means the examples given are not exhaustive – things can be permanent establishments even though they’re not specifically itemized. However, this enumerated list includes structures and relationships like a branch, an office, a factory, a construction site, and an agent in Canada habitually exercising authority to conclude contracts in the name of her principal. It’s highly unlikely that a non-resident coming to Canada and playing in one land-based tournament and then leaving the country would be seen to have a permanent establishment in Canada.

Therefore, it doesn’t appear that a US professional playing at a Canadian land-based tournament would be subject to tax in Canada under the terms of the Treaty, which also means that the tournament would not withhold on any payments to that non-resident. (In each case of a non-resident, it will be important to know what her home country’s tax convention with Canada says, if in fact the two countries have signed one.)

http://taxdood.com/?...er winnings tax

 

Black Friday

On April 15, the Department of Justice seized the internet domains of Absolute Poker, Full Tilt Poker, and PokerStars. At the time, players’ funds on each of these sites were also frozen and inaccessible. To date, only PokerStars has repaid its customers. Absolute Poker is in bankruptcy, and may or may not repay customers. Full Tilt has agreed to forfeit its assets to the U.S. Department of Justice, and French investment firm Groupe Bernard Tapie is currently in the process of purchasing the assets from the DOJ. It has been reported that the DOJ will repay Full Tilt’s U.S. customers, but nothing has been finalized.

With 2011 behind us and a lot of uncertainty remaining, it’s no surprise the number one tax question on poker players’ minds is how to treat the frozen funds on their tax returns. Of course, PokerStars customers have been fully repaid, so the tax treatment of its customers’ gambling winnings is no different this year. With respect to Absolute Poker and Full Tilt accounts, however, the current state of affairs warrants careful consideration of a couple of tax principles.

• Constructive Receipts
  
• see link for more
  

another helpful site

http://claytontax.com/links.asp

 

 

http://www.taxandcontroversy.com/2012/08/withholding-of-tax-on-us-gambling-winnings-for-nonresident-aliens.html

[rcgs59 15]

http://taxdood.com/2012/09/17/tweetbag-withholding-gambling-winnings-of-u-s-nonresidents/#comment-2171

 

 

Tweetbag: Withholding Gambling Winnings of U.S. Nonresidents

September 17th, 2012taxdoodLeave a commentGo to comments

 

Today I received the following inquiry:

“[L]ooking for some info why 30% was tak[en] out of an $83 winning in poker at a NY state casino when most states tax after 5k.”

The casino in this case was the Seneca Niagara Casino, located in Niagara Falls, NY.

To evaluate the issue, we need to know whether the taxpayer is a U.S. resident. That’s because the rules for withholding and informational reporting of gambling winnings under the Internal Revenue Code depend on the residency status of the taxpayer.

It turns out this taxpayer is a resident of Canada. In general, gambling winnings paid to foreign individuals are subject to 30% withholding, assuming the income is not effectively connected with a U.S. trade or business. Proceeds from a wager placed in blackjack, baccarat, craps, roulette, or big-6 wheel, however, are not amounts subject to reporting.

Here, it seems that Seneca properly withheld thirty percent of the $83 winnings, as poker is not exempt from nonresident withholding.

Note that an applicable tax treaty between the United States and a treaty partner may reduce the amount withheld by Seneca Niagara. The United States-Canada Tax Treaty, however, offers no such relief.

Is there any other relief? Suppose the same taxpayer enters in only one other poker tournament during the year paying an $83 entry fee, and loses. Now the taxpayer has net $0 of gambling winnings for the year, yet approximately $25 was withheld on the $83 win. One shouldn’t pay $25 in U.S. tax on net zero gambling winnings. To possibly obtain a refund, the taxpayer could file a Form 1040NR to claim the winnings and losses for the year and the amount withheld.

Keep in mind that the withholding and informational rules discussed above are pursuant to federal law, not state law. Again, U.S. casinos are required to withhold 30% and issue aForm 1042-S to nonresidents unless an exception applies.

Of course, some states have their own separate informational and withholding rules for state income tax purposes. But they are not in lieu of federal law, which still must be followed, but are in addition.

The comment that “most states tax after 5k” is likely a reference to the federal rule that requires all U.S. casinos to issue a Form W-2G to U.S. residents who win more than $5,000 in a poker tournament, net of the entry fee. Note, however, whether a W-2G is actually issued has no bearing on whether the actual winnings are taxable, as all gambling winnings of U.S. residents are taxable, regardless of the amount.

[ftpjesus 0]

There are Federal income taxes and state income taxes. You're not going to have the same rules for state income taxes. Some states don't even have any income taxes.

 

Which is why things vary from State to State. NV where Vegas is has ZERO State Income tax so they have higher theshold to withhold taxes. I had a cash out in a casino/racetrack in WV once had to pay taxes on a 2500 win and then wait to get my money back from WV to pay VA where I was a resident at the time.. Meanwhile my Elderly Mother (dont tell her I said this but since shes over 65 she qualifies as such) binked a 1k cash down in Florida on a slot machine and didnt pay a dime at the Hard Rock in Tampa