Tax Withholding

As of September 28, 2017 TVG updated and began following new regulations for IRS reporting. Many subscribers’ benefit from this update, meaning many winnings that were once reportable are no longer needed to be reported. The previous reporting rules were based on the base wager amount and not the total cost of the ticket.

The new IRS rules are as follows:

When a wager pays more than $600 at odds of 300 to 1 or greater based on total of all wagers placed into a particular pool of wagers:

▶TVG will mail an IRS form W-2G to the subscribers’ for each qualifying wager.

▶W-2G forms are generated automatically when the subscriber meets the reporting criteria.

▶Copies are sent to the IRS and to each subscribers’ state of residence.

When a wager pays out $5,000 or more with odds of 300 to 1 or greater based on total of all wagers placed into a particular pool of wagers:

▶25% of the total payout is withheld and remitted to the IRS in the subscribers’ name.

▶W-2G forms are generated automatically when the subscriber meets the reporting criteria.

▶Copies are sent to the IRS and to each subscribers’ state of residence.

Example: If you create a $1 P6 ticket where the total cost of the ticket is $50 with all of the horses they have selected. The race goes off and you WIN!! You make out big and win $1000 on the wager. The Winnings are only 20:1 based on the cost of the ticket, there would not be reporting to the IRS therefore you do not receive a W2G.

If the Example wager were to make $50,000 in winnings that is 1000:1 you would see that 25% of the winnings would be remitted to the IRS and you would receive a W2G form to report on their taxes

Some states have additional taxes:

Illinois - The state of Illinois collects a 0.38% surcharges on winnings wagers. This is charged on the "Raw Price," which is the "raw" split of the pool, rounded to an appropriate amount. The amount the state takes is rounded up, so if the "raw price" of the Win pool is $5.50, you would receive $5.30 or $5.35.

As of July 9th, 2017 the Illinois personal income tax rate is 4.95%. Any wager which results in proceeds of more than $5,000.00, is subject to reporting and withholding if the amount of such proceeds is at least 300 times as large as the amount wagered. 

Iowa - The state of Iowa withholds 5% from wagers winnings more than $1,000 at odds of 300:1 or greater.

Massachusetts - The state of Massachusetts withholds 5% from wagers winning $600 or more. 

New Jersey - The state of New Jersey withholds 3% from wagers winning $5,000 or more at odds of 300:1 or greater.


If you need additional copies of any W2Gs or year end reports you can find them on the desktop site. See this link for instructions: W2-Gs & Year End Reports

DISCLAIMER - We strongly recommend that you consult with a professional when preparing your taxes. You may need to report your winnings even if you do not receive a W-2G and if nothing is withheld. TVG does not provide tax or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax or accounting advice. You should consult your own tax or accounting advisors regarding your tax or accounting needs.