President Donald Trump said Tuesday he would consider eliminating federal taxes on gambling winnings, a move that would expand his administration’s push to reduce taxes on everyday income, including tips and overtime.
When asked during an Air Force One gaggle if he would potentially nix the tax on gambling earnings, Trump said he’d keep the option open.
“We have no tax on tips, we have no tax on Social Security and we have no tax on overtime,” he said. “No tax on gambling winnings, I don’t know. I’m gonna have to think about that.”
FANATICS EXPANDS FURTHER INTO SPORTS AND BEYOND WITH FANATICS MARKETS PREDICTION TRADING PLATFORM
The One Big Beautiful Bill Act (OBBBA) signed into law over the summer by Trump included “no tax on tips” and “no tax on overtime” provisions, allowing individuals to claim new reductions.
Nearly 60% of all Americans adults gambled in the past year, according to the American Gaming Association, with 30% gambling at a physical casino and 21% placing sports bets.
LEGALIZING SPORTS BETTING IN TEXAS WOULD PAY HUGE DIVIDENDS, STUDY SAYS
A W-2G form is typically issued to anyone who wins over $600 and the regular withholding rate for gambling winnings of $5,000 or more is 24%, according to the Internal Revenue Service (IRS). The tax applies to lotteries, raffles, horse races and casinos, amongst other forms of gambling.
Up to 28% of the prize could be withheld for federal income tax if the individual won more than $5,000, and that amount jumps to 31% if a Social Security number is not provided to gambling establishments.
All gambling winnings must be reported on a Form 1040, and while gambling losses for the year can be deducted, they cannot be more than the amount of gambling income.
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