The IRS announced a new and regular backup withholding rate for the 2018 Form W-2G. Form W-2G is used to report gambling winnings and any federal income tax withheld on those winnings.
Effective for taxable years beginning after December 31, 2017, the withholding rate applicable to winnings of $5,000 or more from sweepstakes, wagering pools, certain pari-mutuel pools, jai alai, and lotteries has been reduced from 25% to 24%.
Additionally, effective for taxable years beginning after December 31, 2017, the backup withholding rate applicable to certain winnings where the winner doesn’t furnish a correct taxpayer identification number has been reduced from 28% to 24%.
To view the announcement, please click here.
About the Author
Adam Rivera is a member of the Regulatory Analysis Team's Direct Tax division at Sovos. His main areas of focus are Federal and State Tax Withholding and Affordable Care Act (ACA) Reporting. Prior to Sovos, Adam worked as a legislative aide in the Florida House of Representatives. He also has experience in securities law, focusing on securities litigation and researching emerging crowdfunding methods of raising capital. Adam is a member of both the Massachusetts and Florida Bars. He earned his B.A. from the University of Florida and his J.D. from the University of Miami.More Content by Adam Rivera