Big wins come with big responsibilities — especially when it comes to the IRS. If you hit a major horse racing payout, your winnings may be subject to reporting and even automatic withholding. These rules apply whether you bet online through platforms like MyWinners or at a physical venue.
When Do You Need to Report Winnings to the IRS?
When Do You Need to Report Winnings to the IRS?
The IRS requires pari-mutuel winnings to be reported if:
Your winnings (minus the bet amount) are $600 or more, and
The winnings are at least 300 times your wager
If both conditions are met, the track or online platform must issue Form W-2G, and you'll need to include it when filing your taxes.
When Is Tax Withheld Automatically?
When Is Tax Withheld Automatically?
In some cases, federal withholding of 24% is required at the time of payout if:
The winnings are $5,000 or more
And they meet the 300x wager rule
This applies to gross winnings, not net profit. It doesn’t matter if you lost $2,000 the day before — the IRS looks at each winning ticket in isolation.
What About Online Platforms?
What About Online Platforms?
If you're using MyWinners, the platform automatically tracks your qualifying wins and issues a W-2G form when needed. It’s your responsibility to report any additional income that doesn’t meet the threshold but still qualifies as taxable
💡 Pro Tip
💡 Pro Tip
Keep detailed records of all your wagers — including bet amounts, dates, and outcomes — to support potential deductions or losses claimed during tax filing.
💡 Did You Know? In 2017, the IRS updated its regulations to consider individual bet combinations (like a $1 Pick 6 with multiple legs), making it easier for bettors to stay under the 300x threshold and avoid automatic withholding.
Frequently Asked Questions
What are the IRS rules for reporting horse racing winnings?
What are the IRS rules for reporting horse racing winnings?
You must report any winnings of $600 or more that are 300 times your original bet. A W-2G will be issued if you meet these criteria.
When does tax get withheld from horse racing winnings?
When does tax get withheld from horse racing winnings?
If your gross winnings exceed $5,000 and are 300x your wager, 24% federal tax is withheld automatically before payout.
Do I need to report all horse racing winnings on my taxes?
Do I need to report all horse racing winnings on my taxes?
Yes. Even if your winnings don’t meet the reporting threshold, they are still considered taxable income and should be reported.
Will MyWinners report my winnings to the IRS?
Will MyWinners report my winnings to the IRS?
Yes. If your winnings meet the federal threshold, MyWinners is legally required to issue a W-2G form for tax purposes.
Can I deduct gambling losses from my winnings?
Can I deduct gambling losses from my winnings?
Yes — but only if you itemize deductions on your federal tax return using Schedule A. You can deduct only up to the amount of your reported gambling winnings, and you must keep detailed records (such as tickets, statements, and receipts) to support your claim. Losses can’t exceed winnings and can’t be used to generate a net deduction.