As you have probably heard, for tax year 2009 New Jersey Lottery winnings from prizes exceeding $10,000 are taxable for New Jersey Gross Income Tax purposes.
This applies to NJ residents and NJ non-residents alike. Previously, NJ residents was not taxed on NJ Lottery winnings.
The NJ Division of Taxation has released a two-page “New Jersey Lottery Questions and Answers”. Click here to download.
Here are some other bits of information from the Q+A sheet –
• The new law is effective July 1, 2009, and applies to taxable years beginning on or after January 1, 2009.
• If you won the New Jersey Lottery earlier this year (on or after January 1, 2009, but prior to July 1, 2009) you have to pay tax on the winnings.
• The NJ State Lottery will withhold NJ Gross Income Tax on taxable winnings at the withholding rate of 3%.
• You may use your gambling losses, including the cost of NJ Lottery tickets, to offset gambling winnings from the same year, not to exceed the total of your winnings.
I am a bit unclear on one item. The Q+A sheet states that “winnings from prizes exceeding $10,000 are taxable for New Jersey Gross Income Tax purposes”. Does this mean that the individual prize from an individual winning ticket must be $10,001 or more in order for the winnings to be taxable?
This applies to NJ residents and NJ non-residents alike. Previously, NJ residents was not taxed on NJ Lottery winnings.
The NJ Division of Taxation has released a two-page “New Jersey Lottery Questions and Answers”. Click here to download.
Here are some other bits of information from the Q+A sheet –
• The new law is effective July 1, 2009, and applies to taxable years beginning on or after January 1, 2009.
• If you won the New Jersey Lottery earlier this year (on or after January 1, 2009, but prior to July 1, 2009) you have to pay tax on the winnings.
• The NJ State Lottery will withhold NJ Gross Income Tax on taxable winnings at the withholding rate of 3%.
• You may use your gambling losses, including the cost of NJ Lottery tickets, to offset gambling winnings from the same year, not to exceed the total of your winnings.
I am a bit unclear on one item. The Q+A sheet states that “winnings from prizes exceeding $10,000 are taxable for New Jersey Gross Income Tax purposes”. Does this mean that the individual prize from an individual winning ticket must be $10,001 or more in order for the winnings to be taxable?
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If during 2009 you have two separate winners – one for $1,500 and one for $9,000 – are the two separate winnings added together to come up with $10,500 in taxable winnings, or is each win treated separately and because no one “prize” was more than $10,000 there is no taxable winnings?
Can anyone provide any guidance on this issue?
TAFN
Can anyone provide any guidance on this issue?
TAFN
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