Gambling winnings in the United States are subject to taxation. In the state of Illinois, the taxation of gambling winnings is regulated by the Internal Revenue Service (IRS) and the Illinois Department of Revenue.
The taxation of winnings over $600 is reported on a Form W-2G, and those over $5,000 are subject to 24% federal income tax withholding. Gambling income is treated as personal income and taxed at 4.95%.
For online gambling, DraftKings, FanDuel, BetRivers, and Caesars are available and also taxed at 4.95%.
However, gambling losses cannot be deducted for Illinois gambling tax purposes.
This article will discuss the ins and outs of Illinois gambling taxes.
Gambling Winnings
Gambling winnings must be reported on Form W-2G and Form 1040 with taxes withheld for winnings over $600 and $5,000, respectively. Different thresholds exist for issuing a Form W-2G, including $1,200 for slot machines or bingo, $1,500 for keno, and $5,000 for poker tournament winnings.
In Illinois, gambling winnings are treated as personal income, with a 4.95% tax rate. Schedule M should be completed to report gambling income and Schedule CR to claim a tax credit for out-of-state winnings.
Online gambling in Illinois is subject to the same 4.95% tax rate, but W-2G or 1099-MISC forms are not issued, and losses cannot be deducted. Popular operators include DraftKings, FanDuel, BetRivers, and Caesars.
Illinois Taxes
In Illinois, gambling winnings are treated as personal income and are subject to a 4.95% tax rate. Gambling winnings are treated as personal income in Illinois. Taxpayers must complete Schedule M to report gambling income. Deductions for gambling losses are not allowed in Illinois. Gambling losses are not deductible in Illinois. Online gambling winnings are also taxed at the same rate of 4.95%.
Online Gambling
Online gambling operators such as DraftKings, FanDuel, BetRivers, and Caesars are available in Illinois. Private operators like DraftKings and FanDuel are also available in Illinois, and the state has a wide array of legal online casinos and sportsbooks.
Gambling losses cannot be deducted for Illinois tax purposes, and the tax rate for online gambling winnings is 4.95%. W-2G or 1099-MISC forms are not issued by online casinos, though they may mail tax forms to gamblers.
Furthermore, Illinois offers a tax credit for out-of-state gambling winnings, which requires a Schedule CR to be completed.
