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How are jackpots split if 10 people won at a workplace?

Topic closed. 6 replies. Last post 8 years ago by PrisonerSix.

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Posted: April 19, 2009, 5:26 pm - IP Logged

Just wondering.    Do all 10 claim it and pay individual taxes?  Is it already divided evenly to the 10 people?  What does the lottery do to make it a fair split amongst the workplace workers?

 

This is regarding Mega Millions

    RJOh's avatar - chipmunk
    mid-Ohio
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    Posted: April 19, 2009, 5:46 pm - IP Logged

    Depends on the state.  Most states will allow a large jackpot to be split among the members of a group if a form with the social security numbers of its member is turned in however smaller winnings can only be claimed by one person who is responsible for all the taxes.  Most states lottery websites explain their rules for during this under their "How to claim your winnings" section.

     * you don't need to buy more tickets, just buy a winning ticket * 
       
                 Evil Looking       

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      Espanola NM
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      March 25, 2009
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      Posted: April 19, 2009, 6:51 pm - IP Logged

      In this situation it may be best to claim the prize under a trust or LLC.   That means obtaining an employer Tax-ID number to handle all of the tax issues and distribution of funds.    Before you or the group does anything....it might be best contact a tax professional to handle the semantics.   

       

      It is also a good idea to make sure the tickets are purchased in advance so enough time can be made to copy the purchased tickets and give copies to each contributor to the pool.    The last thing you want is a clever "runner" or purchaser who says he bought the winning lotto ticket with his own seperate money.

      Also as with everything regarding potential disputes and legal issues....make sure you get some agreements in writing.  such as number of participants, number of tickets/lines, distribution plan, etc....

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        Posted: April 19, 2009, 10:31 pm - IP Logged

        Well. I am the one who is holding the 100 tickets now.   I made copy of all of the tickets to 10 of the people.   And I ain't gonna run because these are my best buds.

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          NY
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          Posted: April 20, 2009, 3:36 pm - IP Logged

          The lottery generally doesn't do anything to make sure it's a fair split, unless somebody starts a legal proceeding before the prize is paid. Depending on the state they either write a single check or they write multiple checks based on what they're told by the person(s) presenting the winning ticket. It's up to the group to make sure the prize is distributed properly. Unless the state allows the winners to remain anonymous having the entire group make the claim  to the lottery is foolish. One person can claim the prize and then distribute the shares to the group, and then only one name gets released.

            grandpajohn's avatar - Lottery-050.jpg
            williamsburg,ohio
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            Posted: April 20, 2009, 7:47 pm - IP Logged

            Just wondering.    Do all 10 claim it and pay individual taxes?  Is it already divided evenly to the 10 people?  What does the lottery do to make it a fair split amongst the workplace workers?

             

            This is regarding Mega Millions

            most are split 10 ways.In Ohio were I am from they were 14 co-workers and a family member of a worker 15 in all who all put in $1.00 and one person put $2.00 they all split the money and the one who played the $2 got another share 14 got $6.3 million and the one got $12.6 million.

            "Don't Give Up.Don't Ever Give Up"

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              Baton Rouge, LA
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              May 7, 2004
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              Posted: April 20, 2009, 9:01 pm - IP Logged

              Just wondering.    Do all 10 claim it and pay individual taxes?  Is it already divided evenly to the 10 people?  What does the lottery do to make it a fair split amongst the workplace workers?

               

              This is regarding Mega Millions

              Every state is different on this.  Some states will issue multiple checks to a pool of winners, and some will only issue one check.  My state, Louisiana, will only issue one check.

              However, regardless of which state you are in, an IRS form 5754 will have to be completed detailing the names, addresses, and SS numbers of the winners.  This is the form if you want to take a look:

              http://www.irs.gov/pub/irs-pdf/f5754.pdf

              That form has to be filled out so it can be determined how to split up the taxes and witholdings amongst the winners, so form W-2G can be issued in January.  W-2G is similar to the W-2 forms issued for wages, except it is for gambling winnings.  There's a link to the form here:

              http://www.irs.gov/pub/irs-pdf/fw2g.pdf

              25% of large jackpots are withheld for the feds, and, at least in Louisiana, 5% withheld for state income taxes.  That may vary in other states and some states don't have state income tax, so check with your state's lottery to find out.

              Hope this helps.  I run a lottery pool myself and in a way, I'm actually hoping to face this dilemma one day.

              Prisoner Six

              "I am not a number, I am a free man!"