Casinos, racetracks, and other gaming operators are responsible for complex tax reporting whenever players win big. The IRS requires winnings that meet certain thresholds to be reported on Form W-2G, Certain Gambling Winnings. Understanding the nuances of these requirements is essential for operators to remain compliant and avoid costly mistakes.
This guide covers when W-2G reporting is required, key definitions, 2025 deadlines, and practical steps for compliance. Whether you’re new to gaming tax rules or updating your processes for the new year, you’ll find what you need to keep your reporting on track.
Note: This information is for informational purposes only and does not constitute formal tax, legal, or compliance advice. Always consult with qualified tax advisors, legal counsel, and your organization’s internal teams for guidance specific to your situation. Additional regulations may apply. For the most accurate and up-to-date information, refer to official government resources and regulatory agencies.
Form W-2G is used to report gambling winnings and federal income tax withheld on those winnings. It provides both the IRS and the recipient with an official record of taxable gambling income, which is crucial for accurate tax filing and reporting.
You must issue a W-2G if payouts meet or exceed IRS thresholds, which vary depending on the type of gambling:
Why this matters: Failure to issue W-2Gs when required can result in IRS penalties and delays for winners trying to file their taxes.
When you prepare Form W-2G, make sure to include:
In certain cases, you may need to withhold 24% of winnings for federal income tax and report that withholding on the W-2G. This is called backup withholding and typically applies when the winner fails to provide a valid taxpayer identification number, or when the IRS notifies you that backup withholding is required. (W-2G Backup Withholding)
W-2G forms follow the same filing season as W-2s, but the submission deadlines differ depending on the recipient:
Missing a deadline can mean penalties for your business and headaches for your customers who need W-2Gs to file on time.
If you need more time:
Extensions are not automatic, so keep records of your request in case of an audit. Requesting an extension early helps you avoid missing a deadline and risking penalties.
If you file W-2Gs late or with errors, you could face:
Dive into specific updates around the general W-2 Form, including more information on IRS penalties in 5 Things You Must Know About the 2025 Form W-2.
Form W-2G may only apply to certain employers, but compliance matters for every gaming business. Build strong processes with regular staff training, routine audits, and clear communication with winners. Staying on top of deadlines and reporting rules helps you avoid penalties and earn your customers’ trust.
With Greenshades, you can handle W-2G forms together with W-2s and 1099s, so your year-end reporting stays accurate, compliant, and efficient.