The Minnesota State Lottery is required to report lottery winnings over $600 to the Internal Revenue Service.
The Minnesota State Lottery withholds taxes before prize money is paid out. Federal and state withholding taxes are deducted for every lottery prize over $5,000.
For Minnesota residents: Current federal tax law requires the Lottery to withhold 24 percent in federal income taxes, and current Minnesota state law requires the Lottery to withhold 7.25 percent in Minnesota state income taxes.
How Do You Pay Taxes on Lottery Prizes Won through TheLotter Minnesota?
Lottery prizes up to $600. Lottery prizes of up to $600 will be paid to winners shortly after receipt of the prize money from the Minnesota State Lottery. In this case, no taxes are withheld from the prize.
Lottery prizes over $600. All lottery prizes of $600 and up are collected by the winners personally at offices of the Minnesota State Lottery.
The Minnesota State Lottery withholds taxes on all lottery prizes over $5,000 as detailed above.
TheLotter Minnesota takes no commission on lottery prizes.
How Do You Report Taxes on Lottery Prizes?
Tax Returns. According to the Internal Revenue Service, winnings from lotteries and raffles are considered gambling winnings. After the end of the year, the Minnesota State Lottery will send each winner a Form W2-G report showing the amount of lottery prize payments to be reported as income and the amounts of federal and state taxes withheld to be reported as credits on the winner’s federal and state tax returns.
Additional Information. Additional information about taxation on lottery winnings can be found on the Internal Revenue Service website. If you have any questions, please consult a professional tax adviser.
