IRS RULES
- Winners are always required to report gambling winnings.
- Bank the Blue is required to fill out and file a W-2G for a winner that receives more that $1,500 for one prize. This is figured by the IRS rules that require reporting of winnings over $600 and 300 times the wager. Since we are selling the tickets 6 for $5, the Bank the Blue finance committee calculated $5 x 300 to get $1,500.
- Bank the Blue is required to fill out a W-2G and withhold federal income tax for winnings over $5,000. Bank the Blue will give the winner a net amount. Bank the Blue keeps the taxes and pays them upfront to the IRS. The winner reports the gross winnings on their income tax and also reports the withholding.