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I'm afraid that I haven't reached the same conclusion in reviewing the law through 9/09.
It appears that the $10,000. exclusion that you are speaking of only related to Lottery winnings.
Specifically, as long as any one lottery prize doesn't exceed $10,000., the prizes are specifically not taxable, no matter how much all the prizes under $10,000. total.
With respect to other gambling, legal or illegal, casino, horse racing, whatever, the rules allow you to deduct your losses & enter the net winnings (you can't deduct NET losses) on a NJ non-resident return.
Here's the link to what I've found so far; read the section on the $10,000. carefully as it can be confusing, but it only relates to the lottery unless there is some further modification after 9/09. I'll check that now.
I can only imagine that compliance is pretty low for non-residents unless they get a gambling winnings 1099.
On your last line, do you mean that very few non-residents comply unless they get a 1099 or letter from N.J.?
Here's an excerpt from the 2010 NJ Non-Resident Income tax Form instruction booklet:
Gross Income includes the following:♦ Wages and other compensation♦ Interest and dividends♦ Earnings on nonqualified withdrawals from qualified state tuition program accounts, including the New Jersey Better Educational Savings Trust Program (NJBEST) accounts♦ Net profits from business, trade, or profession♦ Net gains or income from sale or disposition of property♦ Pensions, annuities, and IRA withdrawals♦ Net distributive share of partnership income♦ Net pro rata share of S corporation income♦ Net rental, royalty, and copyright income♦ Net gambling winnings, including New Jersey Lottery winnings from prize amounts exceeding $10,000♦ Alimony♦ Estate and trust income♦ Income in respect of a decedent♦ Prizes and awards, including scholarships and fellowships (unless they satisfy the conditions on page 24)♦ Value of residence provided by employer♦ Fees for services rendered, including jury dutyNew Jersey gross income also includes the following which are not subject to Federal income tax:♦ Interest from obligations of states and their political subdivisions, other than New Jersey and its political subdivisions♦ Income earned from foreign employment♦ Certain contributions to pensions and tax-deferred annuities♦ Employee contributions to Federal Thrift Savings Funds, 403(b), 457, SEP, or any other type of retirement plan other than 401(k) Plans
You will see that the gambling winnings conforms to what I located related to 2009.
the other factor is that there is no NJ Non-resident filing requirement if your gross income is less than $10,000 if Single or $20,000 if married filing a joint return.
That will probably eliminate most gamblers.
So, I'm confident that we now have the correct information; what you do with it is an entirely different matter.
I have the same booklet, and it says, "#5 - Gambling winnings from New Jersey sources ssuch as winnings from a casino or racetrack located in N.J., including N.J. lottery winnings from prize amounts exceeding $10,000".
Since I never received a 1099 in all these years, and there were no actual gains, should I be concerned. Especially after speaking with N.J. Tax agents?
Where is that located in the book; you can see that's not what it says in the excerpt . I copied.
Your quote says lottery winnings too, must exceed 10,000.
Page 15 - line by line instructions - far right column - #5
I found a specific reference in the law exempting all lottery winnings under $10,000 from NJ tax; of course it would taxed federally
Is it the non-resident booklet?
It is the same thing anyway just worded slightly differently
Am I in BIG trouble?
By the way, the law says NET gambling winnings & asks you to disclose the gross winnings & losses to get to the NET, but then says it isn't required; so I don't know who would do it.............
Form W2G- was there federal & NJ withholding? NJ withholds @ 3% if they are required to withhold; there are other rules re withholding & slots are exempted; I think just table games are subject to the withholding
So did you report the winnings on your federal returns & deduct the losses on Schedule A?
Yes - every year, except for one year where the net win was about 2600. I paid both federal and Maryland tax on that. That was in 2005.
Was there any withholding from federal or NJ?
No - and by the way, my last trip to Atlantic City was 2008.
So you mainly played the slots? I see that's what you said.
Yes - only slots.
So why are you thinking about this now?
You must be good at video poker or have some outstanding luck to beat the slots that consistently
I can't do anywhere near that well in vegas
Anyway if you have losses to offset the gains, it isn't any problem
I was fooling around with Turbo Tax not using my real name, and based on the info they gave me, they wanted to fill out a N.J. tax form. As I said, I've always done my own taxes, and simply wasn't aware that I should file. That's when I started looking into matters. I've had reportable winnings since 1994.
NJ says you can report the net & you'd be under the general rule of not having 10,000 of income or 20,000 if you are married
Yes but in your question you said your losses offset your winnings on your federal returns?
From what I understand, that $10,000 INCLUDES income from ANYWHERE.
No way, that can't be right for non-residents
Yes, in all years but one, and I paid on a net of about 2600 to the Fed and Maryland - that was in 2005. Unfortunately I believe that "from anywhere" to be right, and the turbo tax form put my wages on there but showed 0 attributal to N,J.
OK, I just checked the instructions & you are correct it is everywhere, but what happens in the form is that you get a ration of your NJ income to your total income & then that is used to compute the % of deductions you are allowed against your NJ income; If your net gambling winnings are -0- or less, there's no tax; filing would be an exercise in futility
So you think there's no reason for concern, based on: 1. Low filing compliance by non-residents, and: 2. no tax is really owed, and 3. in all those years, I never got a 1099 or letter from N.J. Tax.?
I wouldn't file, technically everyone who walked away a winner in Atlantic city would have to file a tax return. Most never report a net winnings on their federal return.
I only can say #2
#1 isn't an excuse for not filing;
Yes, but W-2G's are sent to both the state and the fed.
#3 doesn't apply because their rules exempt withholding from slots
Yes, but there's no tax due; so what are you going to do go back to 199whatever it was & file NJ returns through 2008?
All that to pay no tax;
What do you mean that #3 doesn't apply because their rules exempt witholding from slots?
It's an accountants relief act; money for fees with no risk - love it - I think I'll moved to NJ & set up shop outside the casinos
So you think I should leave a sleeping dog lie?
According to the law, there's no NJ withholding on slot winnings
And from I'm reading, it seems there would be THOUSANDS of non-residents who don't file annually
I will only say, that based on the information you furnished & what we've found in the law, I wouldn't file because there's no tax due or such a minor amount it isn't worth the postage
but who's counting, that's why I'm already in my car heading for Atlantic City
By the way, if they were to contact me, I have ALL the records back to 1994. So I would only be guilty of failing to file no tax due. And by the way, I went to Penna. casinos from 2008 to 2010, and had reportable winnings. Losses offset the winnings, so I'm filing 2 years late, and the late filing fee is only $5
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You are literally one in a million!
Thanks for your contribution to reducing the Federal deficit!
What do you mean by your last post - one in a million?
That you out of a million of the rest of us, are concerned about filing a tax return on gambling winnings in a state you don't live in!
Well, that's the way I am - I like everything done properly.
I understand completely; it was a compliment; I wish I had a few more clients like you!
Bye for now. How do I contact you if I have further questions?
We are use to being the "bad guys" & the bearer of bad news'
Just ask for me in opening your question; Steve G. will do it. thanks again..