How are winners taxed?
Both the federal and state government consider winnings from all forms of gaming to be income for tax purposes. By law, the Louisiana Lottery must report winnings from each single ticket with a prize value over $600 to the Internal Revenue Service and the Louisiana Department of Revenue and Taxation. Income tax regulations require the Louisiana Lottery to withhold 25 percent federal taxes from each prize over $5,000 and 5 percent state taxes from prizes of $5,000 or more. A gambling income statement, W2-G, is mailed to the claimant by the end of January in the calendar year following the payment of the prize. The W2-G is mailed to the address entered on the claim form unless the Lottery is notified of an address change before the W2-G is issued.
