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Originally Posted by Holland Hacker
Here is a blurb from Marylands webite for estianted taxes on gambling winnings:
Gambling Winnings
If you receive winnings from Maryland lottery games, racetrack betting or gambling, you must pay income tax on the prize money. This would apply if you were either a resident of Maryland or a nonresident.
If your winnings total more than $5,000, Maryland income taxes will automatically be withheld from your newfound income.
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This could be complex and I wonder how this works with ADW's. Let's say someone lives in California and wagers on the Preakness through Twinspires and cashes a signer for 2k.The feds get a 1099 and the guy reports all of his gambling income proving he lost more than 2k during the year clearing him of any tax liability.
1) He is required to report the $2,000 to Maryland.
2) Does Twinspires send Maryland a 1099?
3) I live in Prince Georges County in which I am taxed 55% of my state tax. Does this guy pay less on that gambling income than I do?
4)He was able to negate The $2,000 with the feds. Does he have to prove he lost $2,000 on Maryland racing during the year to avoid being taxed by Maryland?
In theory everyone is required to report gambling income whether or not it is reported to the IRS. The ADW's have every wager made by an individual which makes me wonder: If a person wins $1,000 on Kentucky and Florida racing during the course of the year they could be taxed on that income, assuming the laws in those states are the same as Maryland,despite the fact that their total gambling income on all tracks could show a loss.
I'm unsure if the above is a fact but that's the way I read it according to the blurb posted by H.H.