Do I Have to File a Tax Return if I Win the Lotto?

by Mary Jane Freeman
Lottery winners still have to pay Uncle Sam.

If you're fortunate enough to win the lottery one day, that luck will not extend to the tax man. That's because Uncle Sam will eventually come knocking and expect his cut. That means you'll have to file an income tax return and include your lottery winnings.

You're a Winner

Gambling winnings are considered income by the IRS. This isn't just winnings from a casino, but also includes winnings from the lottery, or lotto, and scratch-off tickets, among other things. Typically, the payer of the lottery winnings will send the winner IRS Form W-2G, Certain Gambling Winnings, detailing the total amount of the lottery payout and any tax withheld.

Now Pay Up

Since the IRS considers lottery winnings income, the recipient is required to file a federal tax return and pay the required taxes on the income. He must also file a state income tax return on the earnings, unless his state does not have state income taxes or excludes state lottery winnings from them, as California and Pennsylvania do, according to Forbes.

About the Author

Based on the West Coast, Mary Jane Freeman has been writing professionally since 1994, specializing in the topics of business and law. Freeman's work has appeared in a variety of publications, including LegalZoom, Essence, Reuters and Chicago Sun-Times. Freeman holds a Master of Science in public policy and management and Juris Doctor. Freeman is self-employed and works as a policy analyst and legal consultant.

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