Do I have to report gambling winnings to Social Security?


Q. I am collecting Social Security and was wondering if gambling winnings have to be reported to Social Security as income?
— Know when to hold ’em

A. Congratulations on your gambling winnings.

You are correct that this will potentially impact the taxability of your Social Security benefits, but there is nothing that you need to report to the Social Security Administration, said Neil Becourtney, a certified public accountant and tax partner with CohnReznick in Eatontown.

It is the IRS that will receive this information on your Form 1040, he said.

“If one half of your Social Security benefits plus all other gross income – including gambling winnings – exceeds $25,000 if single or $32,000 if married and filing jointly, then a portion of your Social Security benefits will be subject to federal income tax,” he said.

The maximum percentage of Social Security benefits that can be subjected to federal income tax is 85 percent, Becourtney said.

A Social Security Benefits Worksheet is found in the Form 1040 instructions for making this calculation, and the IRS offers this tool to help.

Becourtney said Social Security benefits are exempt from New Jersey income tax.

“New Jersey will, however, tax your net gambling winnings – gambling losses are subtracted from winnings,” he said. “There is an exception for lottery winnings not exceeding $10,000 from New Jersey lotteries, as well as Mega Millions and Powerball.”

All out-of-state lottery winnings are reportable regardless of the amount, Becourtney said.

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This story was originally published on Aug. 9, 2019. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.