I have been thinking about this all night. Here is the issue:
The W2G are sent from the casino to the IRS. So, when you enter the W2G into the software, it needs to match what was sent to the IRS.
The Federal allows you to put gambling losses on the SCH A as an Itemized deduction. As I mentioned earlier, Wisconsin uses the Federal Adjusted Gross Income which does not show the Itemized deduction.
When you go to the Wisconsin return, you are then getting a possible tax reduction for itemized deductions: In 2022 on form 1 this would be line 13.
Federal works fine and you do maybe get something off for your itemizing on line 13 of your Wisconsin return.
The problem is that if you want to record sessions winning, then it messes everything up. There is a form SB that allows adjustments, which seems like where you would make the adjustments to the W2G for Wisconsin but then you would be also getting the Line 13 itemized deduction credit so then you would be double dipping. (Taking off the full amount of W2G and getting credit for the losses again)
I have to say, this sounds like a reporting of W2G issues more than a software issue. Even if I was doing this by hand, it would have issues.
The rule of thumb is always enter forms as they are received.
As far as calling WI DOR, I just called the number I gave you above and pressed I think option 9. See what they have to say! It is definately something that many have issues with but Wisconsin has an issue with how to get the credit properly.
Let me know what you find!
Katherine S 63
