| Posted: August 10, 2004, 6:22 pm - IP Logged | |
Todd,
You are incorrect about the $600 rule. According to IRS regulations, a W2G has to be provided to the player (and filed with the IRS by the issuer) when the threshold of $600 minus the wager amount is reached. (see http://www.irs.gov/businesses/small/industries/article/0,,id=99609,00.html) Since to win the $600 prize, you have to have wagered $1, your net proceeds are $599 and thus do not need to be reported to the IRS. Automatic witholding is required at a net threshold of $5000.
However, all of this is actually a moot point because, according to IRS regulations (see http://www.irs.gov/taxtopics/tc419.html) all gambling income must be reported on your taxes and is taxable. And, unless you itemize, you can't deduct your losses. You just don't receive a W2G unless you win $601 or more.
Virginia allows players to cash tickets up to and including $600 at any online lottery retailer. Tickets $601 and greater must be cashed at a regional office. (as the text below from the VA Lottery web site shows)
"Winning tickets up to and including $600 can be validated and paid at participating Virginia Lottery retail locations. Winning tickets $601or greater must be claimed by mail or at a Virginia Lottery Office. color=#0000ffClick here for a listing of Virginia Lottery office locations." http://www.valottery.com/faq/kb_detail.asp?type=category&category=1&id=71
