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Laws for out of state winners..

Topic closed. 10 replies. Last post 3 years ago by Slick Nick.

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Rochester
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Posted: November 30, 2013, 7:27 am - IP Logged

LP members, I have heard conflcting stories about this and want to hear what you've heard. If a number player lives in New York, and plays the Lotto, the Mega, or the Powerball in another state and he or she wins, are there any problems with residency and making their claims for the jackpot? Smash

Money is a terrible master, but a great servant...Smile


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    Posted: November 30, 2013, 7:36 am - IP Logged

    NO problems just you gotta pay taxes in both states the one you live in and also the one you won in

      Slick Nick's avatar - Lottery-035.jpg
      Rochester
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      Posted: November 30, 2013, 7:38 am - IP Logged

      Thanks Bee, that makes sense! Have a great day...Cheers

      Money is a terrible master, but a great servant...Smile

        HoLeeKau's avatar - YheaShea
        Idaho
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        Posted: November 30, 2013, 3:34 pm - IP Logged

        Many, if not most, states have reciprocity with neighboring states, so you only have to pay taxes to one state.

          RJOh's avatar - chipmunk
          mid-Ohio
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          Posted: November 30, 2013, 3:54 pm - IP Logged

          Many, if not most, states have reciprocity with neighboring states, so you only have to pay taxes to one state.

          Winning a major lottery jackpot have a different set of rules.  Even cities and county have gotten into the act by taxing winning tickets brought in their area.

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

            Slick Nick's avatar - Lottery-035.jpg
            Rochester
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            Posted: November 30, 2013, 4:36 pm - IP Logged

            Thanks for responding!

            Money is a terrible master, but a great servant...Smile

              Slick Nick's avatar - Lottery-035.jpg
              Rochester
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              Posted: November 30, 2013, 4:36 pm - IP Logged

              Thanks for responding.

              Money is a terrible master, but a great servant...Smile

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                NY
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                October 16, 2005
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                Posted: December 1, 2013, 1:38 am - IP Logged

                Many, if not most, states have reciprocity with neighboring states, so you only have to pay taxes to one state.

                The reciprocity agreements only mean that you don't pay any more in taxes than you would by winning in the state with the higher tax rate. The only question is if you pay it all to  one state or split it between the two.

                Whatever state sells the ticket assesses income tax based on your income from the ticket. If the tax rate in that state is lower than in your state of residence, then your home state will tax you on the difference. For example, if you win in a state with a 5% tax and your home state has a rate of 8%, you'll pay 5% to the state that sold the ticket and your  home state will  collect the remaining 3%. If you win in a state with an 8% tax and your home state has a rate of 5%, you'll pay 8% to the state that sold the ticket. Because that exceeds what you would have owed in your home state there is no balance to be paid.

                Buying a ticket in a state with a lower rate than your home state makes your tax returns a tiny bit more complicated. Buying in a state with a higher rate means paying more in income taxes. If I were to win the current MM jackpot (or any jackpot over a certain threshold) I'd be sharing with residents of NY, CT, and PA. PA has no state income tax on prizes from the PA lottery, so ideally I'd buy my ticket(s) in PA. It wouldn't change what I or my friends in CT pay, but it would save my friend in PA from paying NY income taxes on their share.

                  grwurston's avatar - Cute animals_Spider.jpg
                  Winning makes me smile.
                  bel air maryland
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                  Posted: December 1, 2013, 2:16 am - IP Logged

                  LP members, I have heard conflcting stories about this and want to hear what you've heard. If a number player lives in New York, and plays the Lotto, the Mega, or the Powerball in another state and he or she wins, are there any problems with residency and making their claims for the jackpot? Smash

                  If you click on USA MEGA on the left side under quick links, and then click on the FAQ's they explain the tax rates etc.

                  "You can observe a lot just by watching." Yogi Berra, Hall of Fame baseball player.

                  The numbers will tell you what numbers to play. Pay attention to the numbers.

                  Don't just think outside the box, crush it.

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                    Posted: December 1, 2013, 2:49 am - IP Logged

                    The reciprocity agreements only mean that you don't pay any more in taxes than you would by winning in the state with the higher tax rate. The only question is if you pay it all to  one state or split it between the two.

                    Whatever state sells the ticket assesses income tax based on your income from the ticket. If the tax rate in that state is lower than in your state of residence, then your home state will tax you on the difference. For example, if you win in a state with a 5% tax and your home state has a rate of 8%, you'll pay 5% to the state that sold the ticket and your  home state will  collect the remaining 3%. If you win in a state with an 8% tax and your home state has a rate of 5%, you'll pay 8% to the state that sold the ticket. Because that exceeds what you would have owed in your home state there is no balance to be paid.

                    Buying a ticket in a state with a lower rate than your home state makes your tax returns a tiny bit more complicated. Buying in a state with a higher rate means paying more in income taxes. If I were to win the current MM jackpot (or any jackpot over a certain threshold) I'd be sharing with residents of NY, CT, and PA. PA has no state income tax on prizes from the PA lottery, so ideally I'd buy my ticket(s) in PA. It wouldn't change what I or my friends in CT pay, but it would save my friend in PA from paying NY income taxes on their share.

                    Also to add, PA does actually assess a (relatively low) income tax on non-residents who win the state's lottery - it's only 0% for residents.

                    Further, if say you buy in a lower-tax state and win in the early part of the year, but live in a higher-tax state, you could theoretically move to the lower-tax state (or even a no-tax state) during the year to minimize your tax burden. Most states only require taxes paid if your residency in the state was 182-184 days.

                    If you read about some of the fat cats in the New York City area, some of them own pieds-a-terre in the city, but work and primarily live in Westchester/Connecticut/Long Island. They try to avoid New York City income taxes by being in the city only 183 days or less. Some of them hire assistants to ensure that they carefully track the number of days they are in the city as the burden of proof is on them (even 1 minute in the city for a non-transient reason counts as a full day in NYC).

                      Slick Nick's avatar - Lottery-035.jpg
                      Rochester
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                      Posted: December 1, 2013, 5:53 am - IP Logged

                      Thank you GR.

                      Money is a terrible master, but a great servant...Smile