Why Was I Issued a W-9 for a Cruise Jackpot?

Recently, on a cruise, I won a $2,400 jackpot. The slot attendants filled out a W-9 instead of a W2-G. Is this treated the same by the IRS and can you still offset by losses?

[Editor's Note: We put the question to Jean Scott, who as most of you know by now, has co-written four editions of Tax Help for Gamblers. Here's her answer.]

I wonder if the person who asked the question meant Form 1099, rather than W-9. You might get a W-9 in addition to either a 1099 or W-2G if they want to verify your Social Security number.

Most cruise ships now issue W2-Gs for machine wins. 1099s are for tournament wins, contest prizes, etc. So if they issued a 1099 instead of a W-2G, this might have been an employee mistake. It's also possible that this ship's casino doesn't know the rules for U.S. citizens.

When you file, you usually can add 1099 casino wins to your others to come up with a total for the year, then offset it to whatever degree possible with your losses. However, due to the 1099, the IRS might dispute it, assuming that the cruise ship got it right and issued the form for a tournament or contest.

In my experience, even with a land casino that might make this mistake, an explanation letter usually straightens this out, but I also know of a few cases where it took a lot of back and forth. You sometimes have to convince them the 1099 win was connected with your other ordinary gambling action.

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Comments

Dave_Miller_DJTB Jul-27-2022

I’m confused

Why would a cruise ship, presumably flagged to some other country, and operating the casino in international waters, file ANY type of tax forms?

Gregory Jul-27-2022

W-9

According to my research a W-9 form is a request for taxpayer information.  It's a form used to gather information to process another form.  Only guessing, but maybe they are missing info needed to complete your W2-G?

Gregory Jul-27-2022

Re: Dave_Miller_DJTB

From what I've read, winnings in international waters are taxable relative to the where the winner resides.  I'm sure that the various governments figured this out long ago and want their piece of the pie.

Sandra Ritter Jul-27-2022

W-9

A W-9 form is used to have a person vouch for their SSN. It doesn't report winnings of any sort. There probably should have also been a W-2G issued with that vouched for SSN on it. A few years ago my daughter won $1,203 on a ship and received a W-2G.  

Also, you don't need a W-2G to report winnings on your tax return. Winnings should be reported whether or not a W-2G is received. How you determine winnings is another thing that I won't go into. Whatever you report as winnings on your 1040, you can deduct losses up to the amount of winnings. Nowadays it's harder to itemize deductions but many still can, especially if the wins and losses are large enough (in addition to other itemized deductions).

David Jul-27-2022

A better question

Why are gambling winnings, lottery winnings, etc. taxed?

[email protected] Jul-27-2022

David

The same reason that gains in the secondary securities market (which is a pure casino), gains on sales of property, bonuses paid at work, etc., are taxed - they're all defined as income.

VegasROX Jul-27-2022

Taxes and reporting jackpots

It would be advisable for folks to grab both a copy of Jean Scott's book AND the efile booklet from the IRS in regards to reporting wins, and losses, on your tax returns. There are a LOT of people who would not pass an IRS audit, regarding their gambling. A good part do not itemize these days due to the amount of the standard deductions. Don't itemize, you can't claim losses!! Read the books, know the law. Hit a $1000 win on a slot machine,YOU are supposed ti report it, not the casino. I know it's a shocker to many and some will argue as it's not the magical $1200. Read Jean's book, read the IRS information. Know the rules before you get the dreaded audit letter.

Question of the Day - 27 July 2022

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