Here’s How To Pay Taxes On Your Super Bowl Winnings

If you were lucky enough to win a Super Bowl bet this year, your victory comes with the obligation to pay taxes on your winnings.

Whether you won a few bucks from your office Super Bowl Squares pool or hit it big on a sports betting website, you have to pay the federal government its share of the jackpot like you would with any kind of gambling income. States also collect taxes on gambling winnings, each with their own rules. How exactly you pay those taxes, and when, depends on where you won and how much the bet was for. 

If you won a bet placed at a casino, sports betting parlor, or other official establishment, you could receive a Form W-2G. The house is required to do that if you won at least $600, and the payout was more than 300 times what you bet. If you won $5,000 or more, 24% of your winnings will be withheld for taxes right off the bat. 

That paperwork won’t apply for informal bets, but regardless of how much or little you won, you are still supposed to report your winnings as income at tax time next year. There’s a line for gambling winnings on the 1040 form, and tax prep software will give you a way to enter the amount. 

“Whether it's $5 or $5,000, whether it's from an official lottery, a track bet, a casino, a gambling website, or just the office pool, all gambling winnings must be reported on your tax return,” said Mark Steber, chief tax information officer at tax prep company Jackson Hewitt.

If you lost a bet, you may be able to save some money at tax time. You can deduct gambling losses from your income, but there are a few catches. First, you can only deduct losses up to the amount you won that year. Second, you can only claim those gambling losses if you itemize your deductions. That’s unlikely, since for most taxpayers, the standard deduction is the easier and better option—87% of taxpayers went the standard deduction route in 2019, according to IRS statistics. If you do plan to itemize and deduct your losses, the IRS requires you to keep receipts and an accurate record of your winnings and losses. 

Sports betting is becoming increasingly common, and a lot of money is believed to have changed hands as a result of the Chiefs’ 38-35 victory over the Eagles on Sunday. More than 50 million U.S. adults, some 20% of the population, were betting an estimated $16 billion, according to a survey by the American Gaming Association, a 61% increase over 2022. Rookie Super Bowl gamblers lucky enough to be on the winning side of bets may or may not realize that they’ll need to pay taxes on what they won. 

Not reporting your winnings would also be a gamble. The IRS typically audits about 1% of all tax returns. However, Steber noted that the agency has a program where whistleblowers can inform on suspected tax cheats and claim a share of whatever the IRS recovers—large unreported gambling winnings could put a target on your back, if someone in your office pool has a grudge against you. Not to mention, the IRS received an $80 billion boost to its budget last year, with some of the new money earmarked for enforcement. 

“I don't usually like to say, ‘Play your income tax based on your odds of getting audited,’” Steber said. “First of all, that's not legal, but secondly, they've got a whole bunch of new money coming and new employees coming.”