NJ Sports Betting Taxes
In 2018, Governor Phil Murphy signed A4111 which authorized legal online sports betting in New Jersey. Anyone aged 21 and over, from that point on, was allowed to place sports bets over the internet or in person at New Jersey’s casinos, racetracks, and former racetracks.
Sports betting winnings are subject to the New Jersey Gross Income Tax, including all other forms of gambling (casino, racetrack, lotto, etc.).
Federal Tax Form W2-G for Casinos and Bookies
All New Jersey-licensed casinos and racetracks, must report gambling winnings to the IRS on Form W2-G. This includes all partnered online casinos and online sportsbooks. The physical licensed establishment will report these figures.
How Much are NJ Sports Betting Winnings Taxed?
Gambling winnings from a New Jersey location are taxable to non-residents. This includes online sports betting and placing bets at casinos and racetracks. The amount of tax you owe on your gambling winnings, is based on your taxable income bracket.
As stated by the State of NJ – Department of the Treasury – Division of Taxation, players can use gambling losses to offset gambling winnings from the same year as long as they do not exceed total winnings. Losses that equate to more than earning, cannot be reported as a negative figure on the New Jersey tax return. All further information, can be found at TB-20(R) – Gambling Winnings or Losses.
If you report gambling winnings (net of losses) on your New Jersey return, you must attach a supporting statement indicating your total winnings and losses. Taxable New Jersey Lottery and gambling winnings, are must be specified in the category of “net gambling winnings” on your New Jersey Gross Income Tax return.
Your Responsibility to Declare Winnings
The NJ establishment must submit Form W2-G and if necessary, withhold the appropriate tax from your winnings. Either way, if they do submit it or not, you will need to report your net gambling winnings as income on your tax return (along with loss offsets).
If you do receive Form W-2G from a gambling operator, you must not ignore it. File your tax return and categorize this income appropriately. Otherwise, the IRS may be in touch with you.