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New Hampshire crushes lottery winners with new 10% tax

Topic closed. 30 replies. Last post 7 years ago by Bostonmanny.

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JAP69's avatar - alas
South Carolina
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Posted: July 2, 2009, 8:11 pm - IP Logged

Using your example......I think you have to pay NH tax since you bought it in NH which taxes gambling winnings.  NH lottery officials by law is required to report it to NH taxation and revenue.  They will withhold it regardless of whether you live there or not.  The good news is you won't get charged twice since Cali doesn't charge.

Now if situation was reversed and you lived in New Hampshire and bought the ticket in California.  California lottery officials will only send a 1099 to the IRS.    If you decide to still live in NH..... NH will still charge you as a "resident" of NH so long you still are considered a "resident" at the time you claim.     Key word is date of the claim....not the date of purchase/drawing.  Keep in mind.......  If you move right away to California......you are considered a resident of California and are no longer a resident of NH.   Since you are not a resident of NH anymore and since you claim the ticket in Cali......you are in the clear.

That is why it is important to MOVE to the tax-haven state and establish residency depending on how your state taxes stuff

If you are a resident at time of purchase in your home state is the question. That is where they could get you.

I use to live in N.Y. and worked in Vt. I paid Vt state tax at full rate and paid an adjusted tax rate in N.Y. as N.Y. state tax was higher.

MAGA

    dpoly1's avatar - driver
    PA
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    Posted: July 2, 2009, 11:40 pm - IP Logged

    Welcome to the Greed of Envy !!!!!

    "Spread the wealth around"

    We are no longer constituents - we are  merely considered sources of income !!!!!

    Bash

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      NY
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      Posted: July 3, 2009, 1:52 am - IP Logged

      What if you live in a state that doesn't tax lottery prizes and buy a ticket from a state that does tax them?

      I live in California (no tax).  If I bought a PB ticket in NH and it won, would I have to pay the 10% tax to NH?

      You're not quite right about the rules in California.  California doesn't tax winnings from the California lottery. If a California resident wins a prize in another state's lottery the prize will be treated as any other gambling income, which is taxable. Other than playing a game that isn't available in the state of residence, it really doesn't make sense for residents of states that don't tax their lottery winnings to buy tickets in other states.

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        NY
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        Posted: July 3, 2009, 1:53 am - IP Logged

        I realize that.....but that clarification is assuming you purchase a ticket in a different state and remain living in your original state.   That is how you could get taxed twice.

         

        However there is a way around that:

        Let's say I currently live in New Hampshire.   I decide to purchase a lottery ticket in Maine.     Upon finding out I am a winner.....I immediately move to Maine and establish residency in the state of MAINE(driver license, housing, the whole works).    Since Maine allows winners ONE year to claim a prize,there is sufficient time to move and find a place to live in Maine.  As a Maine resident.....I am no longer under New Hampshire control.  When I claim my prize ONE year later or whenever at MAINE headquarters they will issue a 1099 to my Maine address.   Hence....I only pay Maine taxes

        It doesn't matter when you purchase the ticket.  All that matters is where and when you claim at lottery headquarters.    I may be mistaken but I think that is how it works.  As long as you are a resident of Maine at the time you claim your ticket.....you are in the clear.

        Wrong. It has been very thoroughly established that income is taxable once you are entitled to the income. If you don't move until after the ticket becomes a winner (which happens at the moment the winning numbers are drawn, even if you never present it for payment), you will owe any income tax that is assessed. Should you ever find yourself in that situation you might want to consider the substantial difference between tax avoidance and tax evasion.

        FWIW, I haven't seen the actual law, but I suspect it applies only to winnings from the NH lottery, and not all lotteries.

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          Milwaukee, WI
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          Posted: July 3, 2009, 6:36 am - IP Logged

          Ok, I live in WI, and won $1,590 in Illinois, WI/IL agreement said that money in IL does not get taxed. So I payed about $50 Ill taxes and none to WI.  I kept my losing lottery tickets so I did not have to pay and fed taxes.  I probably could have gotten my $50 back, but it wasn't worth it.

          When I won $10K from PB in Wisconsin I had to pay over 6% in taxes. But I reduced that by a bit by showing about $3,500 in loses.

          This is where it pays to save your losing old tickets for the year.

          I do understand before I play that I have to pay taxes on my big winnings.... (everything over $599) minus deductions of course.

          MarkP

            Kaptainess's avatar - hiro bird.jpg

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            Posted: July 3, 2009, 9:17 am - IP Logged

            Don't ride the bus.  If people don't buy the tickets for a month - or even a few weeks they will change their tune.  Trust me. 

            I blogged about the parking meter rates going up, they had to lower them because people stopped using the meters and parked in parking lots.  ROFL!!!  Justice!  See?  Don't ride the bus!

            Same thing, if you don't make purchases they always come to their senses, unless they are completely brain dead.  Ooops!  Most if not all politicians are brain dead ------and I will STRESS THIS POINT ---  In MY opinion.  You may reply that I'm wrong about my opinion, but it will not change my opinion.

            I don't know what they are thinking, that we only put those Jokers in office just to impose more taxes on us?  They don't mind giving themselves a pay raise do they?  How many politicians can you name that voted against having their pay raise?  I'm watching very closely at what is going to happen in my city, the workers that do the work want a pay raise and hold on to their bennies in the new contract, City Council is up for a pay raise also.  They haven't voted on their pay raise yet.  The City workers are waiting to see what City Council gets as a pay raise.  Very interesting!!

            I don't like politicians!!  They don't go after Big Business and make them pay their fair share.  The excuse is that it will hurt job growth.  Ha!  What job growth?  9.5 percent Unemployment?  They have the tax breaks but Big Business is not creating jobs.  So what is the excuse now? 

            We are nickled and dimed out of nearly 1/2 our income, when will it stop????

            Sorry, got off the subject a bit, but think about it, its all related.  :-). 

              Bondi Junction
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              Posted: July 4, 2009, 1:58 am - IP Logged

              Maybe the residence of Granite State should also vote with their pockets, and telephones, and switch to the Massachusetts lottery games, which are available out of state by subscription!

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                Milwaukee, WI
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                Posted: July 5, 2009, 10:56 pm - IP Logged

                > it really doesn't make sense for residents of states that don't tax their lottery winnings to buy tickets in other states.

                As I Wis resident I won in Illinois.  I had to pay Ill taxes but not Wis taxes. It works both ways between the 2 states.  

                So when I win my $82,800,000 in Illinois on Tuesday I pay Ill taxes, but not Wis taxes on that income. 

                Total taxes in Ill is 28%(including fed) in Ill, but 31.75% in Wis.

                Pay it THEN move to South Dakota, Wyoming or Nevada....

                MarkP

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                  Posted: July 5, 2009, 11:10 pm - IP Logged

                  "Total taxes in Ill is 28%(including fed)"

                  Illinois state lottery tax is 3%.  Federal withholding is 25% but, depending on the amount of the jackpot, the actual tax liability could be up to 35%.

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                    Nashua, NH
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                    Posted: July 6, 2009, 11:49 pm - IP Logged

                    I live in NH and play scratch tickets in NH and Mass.. I'm wondering if this ridiculous tax is retroactive before July 1st, when it was implemented.  I just found out about the tax today.. I won $10,000 on a NH ticket and was SHOCKED to hear about this tax this morning at the lottery office.. I am an admitted compulsive gambler, and can't believe they only tax winnings and you can't claim any losses.. I have lost so much more than I have won and now they're doing this???  Hopefully it will help me to kick this awful habit..

                     

                    My question is this:  Is this tax retroactive?  I have won about $20,000 in Mass this year(before the July 1st date).  I'm wondering if I'm going to be in some kind of trouble next tax season if I don't send NH $2,000..  It sure seems to me this is going to be next to impossible for NH to keep track of.  I know one thing: I won't buy a single lottery ticket in NH again until this is tax is modified so that I can claim my losses..

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                      Posted: July 9, 2009, 7:32 pm - IP Logged

                      You're not quite right about the rules in California.  California doesn't tax winnings from the California lottery. If a California resident wins a prize in another state's lottery the prize will be treated as any other gambling income, which is taxable. Other than playing a game that isn't available in the state of residence, it really doesn't make sense for residents of states that don't tax their lottery winnings to buy tickets in other states.

                      Thanks for pointing that out.  My sister bought us subscriptions for Powerball when she was in Florida.  We only have MM and the state lottery here.

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                        California
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                        Posted: July 9, 2009, 7:40 pm - IP Logged

                        Using your example......I think you have to pay NH tax since you bought it in NH which taxes gambling winnings.  NH lottery officials by law is required to report it to NH taxation and revenue.  They will withhold it regardless of whether you live there or not.  The good news is you won't get charged twice since Cali doesn't charge.

                        Now if situation was reversed and you lived in New Hampshire and bought the ticket in California.  California lottery officials will only send a 1099 to the IRS.    If you decide to still live in NH..... NH will still charge you as a "resident" of NH so long you still are considered a "resident" at the time you claim.     Key word is date of the claim....not the date of purchase/drawing.  Keep in mind.......  If you move right away to California......you are considered a resident of California and are no longer a resident of NH.   Since you are not a resident of NH anymore and since you claim the ticket in Cali......you are in the clear.

                        That is why it is important to MOVE to the tax-haven state and establish residency depending on how your state taxes stuff

                        So I'd have to pay 10% to NH + federal income tax + state income tax to CA because it would be gambling income. (thanks to KY Floyd for bringing that to my attention)

                        Ouch.  That's a lot of taxes.

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                          Nashua, NH
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                          Posted: July 10, 2009, 12:08 am - IP Logged

                          NH residents also have to pay the 10% tax on out of state winnings,  provided they require a 1099 form..  In short, any resident of NH is going to get screwed on any big winnings, regardless of what state they bought the ticket in.

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                            NY
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                            Posted: July 10, 2009, 12:36 pm - IP Logged

                            So I'd have to pay 10% to NH + federal income tax + state income tax to CA because it would be gambling income. (thanks to KY Floyd for bringing that to my attention)

                            Ouch.  That's a lot of taxes.

                            As a general rule a tax paid to another state results in a credit towards the taxes you would owe in your home state. If NH didn't tax the lottery win you would simply pay income tax to CA based on your total taxable income, which would include the lottery win. If you have to pay an income tax to the state the winning ticket comes from, that  payment will be credited against  the tax that would otherwise be owed in your home state. The practical result is that  the win is taxed at the rate of the state  with the higher tax rate.

                              savagegoose's avatar - ProfilePho
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                              Posted: July 11, 2009, 11:33 am - IP Logged

                              we should instigate a no smoking , no drinking, no speeding, no gambling week around the world. show these dumb gubmints who and what they mess with with all these taxes, im sure they would crumble. freeking %49!!!!!!!! why the heck dont they buy their own tickets if they want HALF the dang jackpot!

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