REPORTING REQUIREMENTS

 

Racetracks are required by law to report gambling winnings of $600 or more to the IRS if such winnings are at least 300 times the amount of the wager based on a $2 bet.  When such winnings exceed $5,000, they are required to also withhold federal income tax at a rate of 25%.

 

The $600 minimum also applies to $.10 and $1 wagers, but the "at least 300 times the amount of the wager" does not.

 

      Wager         300 Times       Reported       Withholding

$2

$600

 Yes None
$1 $300 No None
$.10 $30 No None

 

Those of you who routinely bet superfectas in $1 or $2 increments can avoid some of the reporting and withholding requirements on certain larger paying superfectas by just making bets in $.10 increments.

 

For example, if you were to routinely make bets in $.10 increments and then repeat it ten or twenty times rather than use the $1 or $2 increment, that would give you ten or twenty smaller tickets to cash rather than one large ticket.

 

   Wager           Winnings            Total             Reported         Withholding

$1 $5,999

$5,999

 Yes $1,499.75
10 X $.10 $599.99 $5,999 No None

 

      Wager         Winnings            Total             Reported         Withholding

$2 $11,998

$11,998

 Yes $2,999.50
20 X $.10 $599.90 $11,998 No None

 

If you should win a 10-cent superfecta bet that pays you $600 or more, you will have to provide the racetrack with your name, address and Social Security number before you can cash your ticket.

 

You would go to the special IRS sign-up window at the racetrack to complete the necessary paperwork and to collect your money.  If you don’t have both your ID and your Social Security card with you, they won’t be able to cash your ticket.

 

The racetrack will send you a Form W-2G the following January to report to you the amount of your winnings for income tax purposes.