New Jersey Gambling Legislation
Lottery and Gambling Winnings
The Garden State’s successful gaming industry boasts revenues in excess of $2.5 billion for both 2015 and 2016 — a figure to which online gambling sites contributed $148.9 in 2015 and $196.7 million in 2016 — but that doesn’t necessarily equate to a tax windfall for New Jersey. Due to gaming taxation rates that are tempered compared to. The Republican governor made the move only one day after the state Assembly gave final legislative passage to the measure (S2460), which strikes provisions from New Jersey's law books that ban. Atlantic City has held a monopoly on casino gambling in New Jersey since voters passed legislation in 1976. (Image: Flickr) Trenton has five bills in the capital that – if passed – would allow. New Jersey voters in 2011 voted for a state constitutional amendment that would permit sports gambling. The next year, the NJ State Legislature enacted the Sports Wagering Act ('2012 Act'), allowing sports wagering at New Jersey casinos and racetracks. New Jersey became the first state in the USA to license sports betting in 2018, when they successfully overthrew the professional and Amateur Sports Protection Act, which was the legislation which outlawed sports betting across the country. New Jersey was at the forefront of a fight to legalise sports betting in the USA.
Winning the Lottery or scoring on a sports wager can change your life in profound ways. Congratulations on your lucky break!
New Jersey Gambling Legislation Rules And Regulations
Just remember that your good fortune includes a responsibility to pay taxes and fees on those winnings.
Gambling Winnings:
In 2018, Governor Phil Murphy signed a law that authorized legal sports betting in New Jersey. The law (A4111) allows people, age 21 and over, to place sports bets over the internet or in person at New Jersey's casinos, racetracks, and former racetracks. Sports betting is now among the many forms of gambling winnings that are subject to the New Jersey Gross Income Tax, including legalized gambling (sports betting, casino, racetrack, etc.) and illegal gambling.
Lottery:
New Jersey Lottery winnings from prize amounts exceeding $10,000 became subject to the Gross Income Tax in January 2009.
Withholding Rate from Gambling WinningsNew Jersey Gambling Legislation Passed
New Jersey Income Tax is withheld at an amount equal to three percent (3%) of the payout for both New Jersey residents and nonresidents (
New Jersey Gambling Legislation Commission
N.J.S.A.New Jersey Sports Betting Legislation
54A:5.1(g)).
Withholding Rate from Lottery Winnings
The rate is determined by the amount of the payout. If a prize is taxable (i.e., over $10,000), the entire amount of the payout is subject to withholding, not just the amount in excess of $10,000. The withholding rates for gambling winnings paid by the New Jersey Lottery are as follows:
- 5% for Lottery payouts between $10,001 and $500,000;
- 8% for Lottery payouts over $500,000; and
- 8% for Lottery payouts over $10,000, if the claimant does not provide a valid Taxpayer Identification Number.
Companies that obtain the right to Lottery payments from the winner and receive Lottery payments are also subject to New Jersey withholdings. Each company is required to file for a refund of the tax withheld, if applicable.
LotteryNew Jersey Lottery winnings from prize amounts exceeding $10,000 are taxable. The individual prize amount is the determining factor of taxability, not the total amount of Lottery winnings during the year.
- For example, if a person won the New Jersey Lottery twice in the same year, and the winning prize amounts were $5,000 and $6,000, these winnings would not be subject to New Jersey Gross Income Tax. However, if that person won the Lottery once and received a prize of $11,000, the winnings would be taxable.
- This standard for taxability applies to both residents and nonresidents.
- The New Jersey Lottery permits donating, splitting, and assigning Lottery proceeds to someone else or to a charity. If you choose to donate, split, or assign your Lottery winnings, in whole or in part, the value is taxable to the recipient in the same way as it is for federal income tax purposes.
Making Estimated Payments
If you will not have enough withholdings to cover your New Jersey Income Tax liability, you must make estimated payments to avoid interest and penalties. For more information on estimated payments, see GIT-8, Estimating Income Taxes.
Out-of-State Sales:
Out-of-state lottery winnings are taxable for New Jersey Gross Income Tax purposes regardless of the amount.
New Jersey Gambling Legislation Laws
New Jersey Gambling Legislation 2020
Gambling winnings from a New Jersey location are taxable to nonresidents. Gambling includes the activities of sports betting and placing bets at casinos and racetracks.
Calculating Taxable Income
You may use your gambling losses to offset gambling winnings from the same year as long as they do not exceed your total winnings. If your losses were greater than your winnings, you cannot report the negative figure on your New Jersey tax return. You must claim zero income for net gambling winnings. For more information, see TB-20(R), Gambling Winnings or Losses.
You may be required to substantiate gambling losses used to offset winnings reported on your New Jersey tax return. Evidence of losses can include your losing tickets, a daily log or journal of wins and losses, canceled checks, notes, etc. You are not required to provide a detailed rider of gambling winnings and losses with your New Jersey tax return. However, if you report gambling winnings (net of losses) on your New Jersey return, you must attach a supporting statement indicating your total winnings and losses.
Reporting Taxable Winnings
Include taxable New Jersey Lottery and gambling winnings in the category of “net gambling winnings” on your New Jersey Gross Income Tax return.