Cash prizes are possible at sweepstakes casinos, but if you win something at Stake.us, you should know whether to pay tax on your winnings. The same applies to other sweeps casinos too. You can find the facts in this article, so you’ll understand whether paying tax is required on Chumba Casino winnings or on prizes from LuckyLand Slots too.

If you’re considering joining Stake.us, pick up the exclusive 5% rakeback bonus with the code MIKBONUS when you arrive. You can then see how to get closer to those sweepstakes prizes.

>> Register Now at Stake.us & Use Exclusive Code MIKBONUS <<

An introduction to taxes on sweepstakes winnings

Sweepstakes casinos have swept across America and gained many fans in recent years. People love the idea of playing social casino games and getting a chance to win cash prizes.

It’s important to understand the difference between these casinos and standard casinos before exploring the tax implications involved with prizes:

• Standard online casinos allow deposits, so you can use your money to bet on casino games for a chance of winning cash prizes
• Sweepstakes casinos allow purchases of Gold Coins to play the social games, but you cannot buy Sweeps Coins to play the real games

It’s the Sweeps Coins you use to try and win prizes when playing at a sweepstake casino. You then redeem these prizes for cash, and sometimes (depending on the individual site) via a gift card. So if you use these Sweeps Coins to redeem money from LuckyLand Slots, you’ll have to pay tax on the winnings.

Are sweepstakes prizes viewed as taxable income?

Yes. This means you should keep a record of any sweeps prizes you end up winning while playing at these casinos. Even if you only win a few dollars, you must still keep note of the winnings and report them when you submit your next tax return.

Keep track of your winnings in a diary

This will make it easier to report your winnings when the time comes to fill in your tax return. Make sure you write down the following details:

• The prize amount received
• The site you won it from
• The date you won it on
• Details of when you received the prize and how you received it, i.e., gift card or cash deposit

>> Register Now at Stake.us & Use Exclusive Code MIKBONUS <<

Do you need to keep records of Gold Coin purchases?

No. This might sound confusing, because if you win while betting at a standard online casino, you should keep track of your losses and your winnings. In this scenario, you won’t deduct your losses from your winnings and report the net amount. Instead, you report the gross winnings, and then report details of your losses separately, so the IRS has details of everything.

However, when you are playing casino games at a sweepstakes site, it operates using different rules. You’ve already seen how there are two types of coins at a sweeps casino – the Gold Coins and the Sweeps Coins. Most players use these casinos without ever making a single purchase. They’ll receive regular Gold Coins to play with, usually when performing certain actions such as signing up for an account and logging in each day.

However, the Gold Coins have no value and are only for playing fun games. There is never a chance of winning a real prize with these, so they are not of concern when you are thinking about taxes to pay on any winnings. Gold Coin winnings are not real, only for social play within the website.

Your Sweeps Coins are the ones you’ll use to try and win real prizes with. You cannot purchase these, so there is no need to keep records of purchases. You only need to detail anything won on a sweepstakes casino site.

Can you claim your prize as a gift card to avoid paying tax on it?

This is a common question, and it is true that some casinos do offer you the opportunity to claim your prize as a gift card rather than choosing cash. However, it merely changes the form you receive the prize in and not the amount. You’ve still won that amount, and so you must keep details of it for reporting on your annual tax return when the time comes. So even if you redeem a gift card for Chumba Casino, you’ll pay tax on the winnings.

Honesty is always best in this scenario, and all sweeps winnings should always make it onto your tax return, no matter how small they might be.

Which tax forms are relevant to sweeps winnings?

There are two forms you may encounter when you have won a sweepstakes prize and you need to declare it to the IRS:

1. Form 1099-MISC – this form covers miscellaneous earnings, detailing at least $600 in prizes or awards for the purposes of this article
2. Form W-2G Certain Gambling Winnings – this form covers gambling winnings and may be issued by a website if you win enough to warrant one

If you are unsure which form you need to complete when doing your tax return, you should consult a tax adviser to make sure you get it right. While some people win small amounts while playing with Sweeps Coins, it is possible to win much more. A lot depends on how many Sweeps Coins you have to play with, and the size of the prize you manage to win while using them.

>> Register Now at Stake.us & Use Exclusive Code MIKBONUS <<

Make sure you’re prepared to pay tax if required

This is the most important takeaway to remember from this article. It’s easy to get swept up in the excitement of winning a sweepstakes prize. Of course, if you claim a welcome offer like the exclusive Stake.us 5% rakeback bonus with the code MIKBONUS, and you never play with Sweeps Coins, you don’t need to worry about any potential taxes.

However, if you’re among thousands of players who do like to collect as many Sweeps Coins as they can to play for cash prizes, you do need to be aware of the rules. It’s best to know about them in advance, rather than waiting for the day when you might just land a sweepstakes prize. If it is a big one, you’ll need to focus on the tax implications along with celebrating your good fortune.

How much will you pay in tax?

The flat rate for casino prizes is set at 24%, although of course, this could change if the rules change, so it’s sensible to keep up to date on the current percentage. If you win, say, $25, it won’t be a problem to find 24% of that amount to pay to the IRS when the time comes.

However, if you win several hundred dollars or maybe even more, you can see the amount of tax due is going to be bigger. It’s best to set aside 24% of the amount won when you receive it, so you don’t need to get that money together later.

Some casinos may withhold the tax amount on your winnings before you receive them, which does make things easier for you. If not, you can reserve the amount for tax as described above once you receive your prize. Sweepstakes prize amounts are capped in some states, so you may wish to look up the maximum you can win as well.

Remember to declare all sweepstakes prizes when required

Make sure you mention everything:

• Even if you claim a gift card
• Even if you claim a few dollars and nothing more
• Even if you receive the relevant tax form from the sweeps casino you played at

You always need to declare all winnings.

That’s the bottom line, and it’s the one you always need to return to. There could be additional tax implications for you depending on the US state you live in. It’s impossible to cover everything in one article, so make sure you consult a tax specialist in your state to see if there is anything else you need to pay on your winnings. It’s always better to make sure you are clear on the rules.

3 of the most entertaining sweepstakes casinos

There are countless sweepstake websites around the US, so which ones are going to provide you with the best experience even if you do not win any cash prizes? Discover the answers in the following sections.

Stake.us is top of the tree

Firstly, you can claim your exclusive 5% rakeback bonus when you sign up to play at Stake.us. Use the coupon code MIKBONUS to make sure you trigger yours. However, even the landing page has much to share if you’re still wondering whether to sign up, providing clues to just how dramatic the playing experience could be.

The casino has over 350 games provided by several developers, with Pragmatic Play offering over 300 of those to date. You’ll get the opportunity to try some famous slot games, including The Dog House Megaways – one of several Megaways titles available. The new releases area means you never need to miss the latest slots to drop onto the Stake.us website. However, the Originals area is worth recommending, as it contains games you’ll never find anywhere else.

Some sweeps sites only offer slot games, but at Stake.us, you can stake your claim to play far more diverse games too. The Originals area is proof of this, with dice, Plinko, and Mines among the options there.

Pros of choosing Stake.us

• Fast registration
• Available in most US states
• Exclusive casino games
• 4 game studios included

>> Register Now at Stake.us & Use Exclusive Code MIKBONUS <<

Will you pay tax on winnings at Chumba Casino?

It would be excellent to be in a situation where you have reason to think about that, but there’s a lot of entertainment to come first. You can see some of the games offering a path to that entertainment on the landing page. Titles such as Wild Krakatoa and Better Wilds hint at themes most players will appreciate, with the complete collection available to players who have signed up to access everything Chumba can offer.

While some sweeps casino sites only give away jackpots in Gold Coins for social gameplay, Chumba stands out with a twist. They provide jackpots in Sweeps Coins, providing players with multiple opportunities to win while playing titles such as Dancing Gold and Stallion Grand. Their sweepstake rules explain the other ways you can receive more Sweeps Coins – the coins you’ll need to find and play to convert into cash prizes if you win.

The contact page provides a portal to their help desk area, packed with questions, answers, and chances to submit tickets for further information if you wish. It removes the need for a live chat facility, as they cover lots of topics there.

Perks to enjoy at Chumba Casino

• Over 100 games
• Jackpot titles
• Slots and table games
• Sweeps Coins jackpots

>> Register Now at Chumba Casino & Use Exclusive Bonus <<

Start spinning for a chance of prizes at LuckyLand Slots

Arrive at LuckyLand Slots and you’ll be greeted with a video explaining how it all works. A message below that part of the screen separates the Gold Coins from the Sweeps Coins, with the latter available to help you try and win real prizes. By the time you reach the bottom of that page, you’ll have an understanding of how LuckyLand operates.

The games area gives insight into the slot themes provided, with screenshots and bullet points highlighting the best bits of each title. Bonus spins and bonus rounds are commonplace throughout, as are lots of colorful images and action-packed gaming.

Their sweeps rules sit separately from the main terms of service, making it easier to read and understand how the site works if you’re new to the sweepstakes model. The large typeface used throughout the site means nothing is hidden away in small print either, making LuckyLand one of the leading sites to check out if you’ve never seen a sweeps site before. Hopefully, you may soon have cause to ask about paying tax on your LuckyLand Slots winnings.

Advantages of opting for LuckyLand Slots

• Online help desk
• Clear rules
• Quick redemptions
• Dozens of slots

>> Register Now at Luckyland Slots & Use Exclusive Bonus <<

Learning about tax on winnings at Stake.us and more

It’s easy to think about spending time enjoying these sweeps casino websites, but you can see there are tax implications to consider as well if you end up winning some prizes. Many individuals use the sites with Gold Coins and never worry about sweeps prizes, but if you decide to play at one of the above sites, it makes sense to understand more about paying taxes on any winnings you might receive in the future. Don’t forget that you can claim an exclusive 5% rakeback bonus at Stake.us when you join – just use the code MIKBONUS to receive yours.

>> Register Now at Stake.us & Use Exclusive Code MIKBONUS <<

FAQ

Do you pay tax on winnings in the US?

According to the official IRS website, winning $600 or over should trigger the issuance of a W-2G form by the business you won it from. Everything won should be included on your tax return, even if the amounts are far smaller than $600. The IRS will use the information to calculate whether you need to pay tax on those amounts, as everyone will have their own individual financial situation to report.

What happens if you forgot to report gambling winnings?

It’s best not to forget as you won’t escape paying taxes on them. If you win and you don’t add those winnings to your tax return, you will usually receive a CP2000 form. This is a notice for Underreported Income. You will still need to pay tax on the amount won, along with potential penalties and interest on the amount owed.

How does the IRS find out about gambling winnings?

Oftentimes, you’ll receive a W-2G form detailing your winnings. If you get one, you can be sure the IRS will receive a copy as well. However, even if this form isn’t issued, you are still responsible for adding any winnings you have received to your tax return and paying the relevant amount of tax on them. You must always be honest about this additional income, even if it was a one-off event.

Can I use a tax on gambling winnings calculator?

Yes, you can find several of these online that are free to use. It is easy to enter the amount you have won, so you can see the amount of tax due to pay on it. It is always best to consult a professional tax adviser if you are in any doubt about the amount you need to pay, or how you should declare winnings to the IRS.

Do you have to pay taxes on each prize you win?

Taxes are calculated for each tax year, so if you win two or more prizes at Chumba Casino or indeed another sweepstakes casino, you don’t pay tax on them individually. Instead, you pay tax on the total prizes won in a year, according to current tax rates and rules. This only applies to prizes won by playing Sweeps Coins, which you can then convert to request a prize redemption. If you are only playing with Gold Coins, you won’t need to worry because they are not converted to cash. Instead, they are only used for social gameplay and enjoyment and have no monetary value.

None of the information on this website is investment or financial advice and does not necessarily reflect the views of CryptoMode or the author. CryptoMode is not responsible for any financial losses sustained by acting on information provided on this website by its authors or clients. Always conduct your research before making financial commitments, especially with third-party reviews, presales, and other opportunities.