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I live in Texas and won money at casino in Oklahoma, I've already entered the w2g required on my federal taxes, but do I owe state taxes in Oklahoma? If so, would I fill out a state return for Oklahoma?

I also won money from the casino on a cruise I took, would I need to pay state taxes on that?
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29 Replies
NancyG
New Member

I live in Texas and won money at casino in Oklahoma, I've already entered the w2g required on my federal taxes, but do I owe state taxes in Oklahoma? If so, would I fill out a state return for Oklahoma?

Oklahoma, yes - you would file as a non-resident OK Form 511 NR.  Cruise, no - as you live in Texas and there is no state income tax.

On your OK Form 511 NR, you are allowed to deduct either your OK standard deduction or your Federal Itemized deductions.

When you entered your Oklahoma gambling winnings and all gambling losses in the federal sections of TurboTax, the gambling losses will transfer over to the Oklahoma return as part of your itemized deductions. There is no additional place to enter these losses in the OK return. There is no distinction for state of gambling loss.

You could still wind up owing some tax to Oklahoma even though you claim losses up to the extent of your gambling winnings. That's because OK computes a nonresident taxes based on their federal Adjusted Gross Income, then applies a percentage to the total tax based on the ratio of your income from OK to your total income. 

Chris7155
New Member

I live in Texas and won money at casino in Oklahoma, I've already entered the w2g required on my federal taxes, but do I owe state taxes in Oklahoma? If so, would I fill out a state return for Oklahoma?

I cannot see the 511 NR form to check it until I pay and file? The gambling wins come over automatically. Would I leave the wins as on the federal if they were all won in Oklahoma? I see where you said it would transfer over but I am assuming you will still pay taxes on the wins and no credit for the loss??
NancyG
New Member

I live in Texas and won money at casino in Oklahoma, I've already entered the w2g required on my federal taxes, but do I owe state taxes in Oklahoma? If so, would I fill out a state return for Oklahoma?

Did you record your losses on federal Schedule A? If you did not, you will want to show your losses on the Oklahoma return as itemized deductions. You should show all your losses on this form.  You will also want to make sure that your cruise winnings are not included in your Oklahoma winnings.
jfmurphy4
New Member

I live in Texas and won money at casino in Oklahoma, I've already entered the w2g required on my federal taxes, but do I owe state taxes in Oklahoma? If so, would I fill out a state return for Oklahoma?

How can OK apply a percentage to the total tax based on the ratio of your income from OK to your total income when there is no OK income if winnings equal losses?
jf3
New Member

I live in Texas and won money at casino in Oklahoma, I've already entered the w2g required on my federal taxes, but do I owe state taxes in Oklahoma? If so, would I fill out a state return for Oklahoma?

That's what i would like to know as well.  The way it computes essentially taxes me on my own non-resident 9-5 income according the the 511NR that is generated.  I find that to be complete BS that a state in which I spent money in, then won back (or vice-versa) can then tax me on my own income from a different state.  Doesn't add up.  Sounds like if they want to do people dirty this way, then need to withhold state taxes when the gambling winnings are paid.  They are basically robbing people if this is how things end up...why would ANYONE want to gamble in their state?

I live in Texas and won money at casino in Oklahoma, I've already entered the w2g required on my federal taxes, but do I owe state taxes in Oklahoma? If so, would I fill out a state return for Oklahoma?

jf:   
You are posting in an already-answered thread from 2 years ago that has long been moved to a different queue.  It will not show to the bulk of the forum as needing current help.

I can't help you with the gambling part, but I can comment on what you said about the OK return "taxes me on my own non-resident 9-5 income."   

At this time of year, a lot of state products are still being finalized.   It's possible the Form 511NR and associated forms that report on Form 511NR are not completely available yet.  See this FAQ:
<a rel="nofollow" target="_blank" href="https://ttlc.intuit.com/questions/1908857-state-forms-availability-table-for-turbotax-individual-per...>

Your non-resident income, i.e., all income that is not Oklahoma-sourced should be excludable on a separate OK schedule where that is allocated and then reported back on the 511NR.  I think I just found some info about it; see the next paragraph.

 I'm not familiar specifically with OK state tax or their reporting forms, but I just looked briefly and with a quick search and glance at the instructions it looks like OK uses an extra page called 511NR-1 "Income Allocation for Nonresidents and Part-Year Residents."  I looked at that Form 511NR-1, and it has 2 columns--one for Federal amount of each income type, and one for Oklahoma amount of each income type.  TurboTax should fill that out for you in the OK state interview, and then in the final reporting it should exclude your non-resident income and use only the Oklahoma-sourced income.

I have seen how other states do it, so it may work the same way for Oklahoma.   If you are a non-resident, I presume most of those income types in the Oklahoma column will have zeros if it's done the same way as other states.  If your gambling winnings are your only "Oklahoma-sourced" income, then that may be your only entry in that OK column.  Maybe you have not gone through the interview completely and haven't answered each screen to allocate the income, or it may be that that 511NR-1 allocation form is not yet available.   Many states have forms that are not yet finalized and available.   Did the interview offer a screen where you can allocate each type of income?

I'm a fellow user, not a tax person.  If you need someone who is specifically knowledgeable about OK non-resident returns and how to allocate your non-Oklahoma and Oklahoma income, I may be able to find one to assist you.  Or if you need help with reporting gambling winnings.

I live in Texas and won money at casino in Oklahoma, I've already entered the w2g required on my federal taxes, but do I owe state taxes in Oklahoma? If so, would I fill out a state return for Oklahoma?

jf:
Here's an addendum to that long comment above.

If you want to see the full Oklahoma instructions for Form 511NR (Non-Resident and Part-Year Resident return) and associated schedules, here is a packet that has the instructions as well as the actual forms for viewing.   This is where I saw what the 511NR-1 Allocation form looked like.  It shows on Page 39 of the PDF.
<a rel="nofollow" target="_blank" href="https://www.ok.gov/tax/documents/511NRPkt-18.pdf">https://www.ok.gov/tax/documents/511NRPkt-18.pdf</...>

If you are using desktop TurboTax (CD/download), you have the even better option of viewing the actual forms in your return and your entries by going into Forms Mode.

I live in Texas and won money at casino in Oklahoma, I've already entered the w2g required on my federal taxes, but do I owe state taxes in Oklahoma? If so, would I fill out a state return for Oklahoma?

@jf
Man, that is extremely hard to read in one big paragraph like that.  It hurts my eyes and gives me a headache.  🙂
It does look like the OK non-resident forms are not scheduled to be finalized and available until January 24.  They may be partially functional in the meantime.

I'm a fellow user in another state and know nothing about how Oklahoma deals with gambling losses, or if it uses the calculation for gambling losses that the Federal return used, and then allocates it.

I'll see if I can attract someone familiar with both Oklahoma returns and gambling losses to comment in this thread during the day.   If not, we can tell you how to phone TurboTax Support for realtime help.
jf3
New Member

I live in Texas and won money at casino in Oklahoma, I've already entered the w2g required on my federal taxes, but do I owe state taxes in Oklahoma? If so, would I fill out a state return for Oklahoma?

Many thanks.  Sorry for the long paragraph.  Simply put, I hope the finalized forms accurately reflect what should constitute legal taxation based on federal standards.  That being said, I hope that means, if I must, I can claim the losses in the appropriate place on their state forms (or they will be transferred over correctly when things are finalized).  I also made the formatting above a little easier on the eyes.  😉

I live in Texas and won money at casino in Oklahoma, I've already entered the w2g required on my federal taxes, but do I owe state taxes in Oklahoma? If so, would I fill out a state return for Oklahoma?

@jf  I don't know if you will get this message in email.   When you edited your comment, the forum spam filter kicked in and sent this whole thread to the archive.  So you'll think your thread has disappeared.   But I've just asked a Moderator to restore it, but that won't happen until later this morning.   So don't worry...it should be back soon.
jf3
New Member

I live in Texas and won money at casino in Oklahoma, I've already entered the w2g required on my federal taxes, but do I owe state taxes in Oklahoma? If so, would I fill out a state return for Oklahoma?

Yes, I got the message.  Good ole technology being its usual self.  Hopefully someone will be able to shed some light on this matter.  It really is a true burden for people like myself, who do try to keep records and report everything in earnest, to get screwed over once or even twice because of obscure tax laws whether state or federal.

I live in Texas and won money at casino in Oklahoma, I've already entered the w2g required on my federal taxes, but do I owe state taxes in Oklahoma? If so, would I fill out a state return for Oklahoma?

@jf   You say you edited your long paragraph to format it, but I don't see it at all now.  It looks like it was completely deleted.   That's odd.  Even if one deleted all the contents of a comment, the box with username, date/time should still exist.  But it looks like it is completely gone.  The forum filter does not like a lot of heavy editing or several edits and saves.  So it looks like it zapped your whole paragraph without a trace--not even the space where it had existed.

I've put in a request for someone to help you with this issue.   So you may need to explain again what your concern was with the way Oklahoma appeared to be handling the gambling losses in your non-resident 511NR return.

I live in Texas and won money at casino in Oklahoma, I've already entered the w2g required on my federal taxes, but do I owe state taxes in Oklahoma? If so, would I fill out a state return for Oklahoma?

Unfortunately OK has us over a barrel.  I have been down this road every year with the OK Tax Commission.  While Federal allows offsetting losses, Oklahoma does not have a specific deduction.  In a nutshell, OK takes winnings and applies a percentage rate against federal taxable income which includes the reported losses and this is how they compute your OK state tax.  There is no recourse.  Additionally if your tax owed is over $500 I think, they want you to make estimated quarterly tax payments for the following year.  If you do not and owe tax the next year, they charge penalties and interest on the quarterly amounts that you should have paid.   How OK can legally charge state tax based on a percentage of income earned in another state is beyond me.  Because they receive the WG2 forms, they will start sending you letters, etc. about filing OK tax return if you do not report the winnings.  It is all part of the OK state tax code and I have researched extensively but there is no recourse.  Either pay or suffer the consequences.  I cannot understand how this is legal.
jf3
New Member

I live in Texas and won money at casino in Oklahoma, I've already entered the w2g required on my federal taxes, but do I owe state taxes in Oklahoma? If so, would I fill out a state return for Oklahoma?

Okay, so I downloaded the 2018 2-D 511NR Oklahoma form from their website (it does the calculations for you as you input).  For the sake of argument, I entered numbers as would appear from my federal 1040 appropriately and I will pretend that my losses equal my winnings.

When I input the numbers into the 511NR-1 worksheet, I put my Texas income and Oklahoma gambling winnings combined in Line 1 on the federal amount, and only the Oklahoma gambling winnings on the OK Amount.

On Line 16 (Total Federal Adjustments to Income) I put my total federal adjustments (deductions) on the federal amount, but on the Oklahoma amount I put only the federal adjustments that apply to the Oklahoma sourced income (i.e. the gambling losses only; no mortgage interest, taxes, etc).

I then went to the 511NR-D and input my federal deductions.  Once those numbers are in, the form automatically limits your deduction to the Oklahoma limit of $17,000.  At this point, when I go back to the tax owed for the year on Line 44 on the main form, it says 0 (yes ZERO).

To test my theory as to why I am upset, I removed the Federal adjustments to income from the 511NR-1 worksheet out and let the form recalculate (I am not even sure I am allowed to use that line for anything related to deductions anyway; but it does not really specify in the instructions).

When the form recalculates the new amount, it is obviously very high.  I checked my theoretical number on the Oklahoma tax table to see which income level it corresponds to.  I will not disclose my exact numbers, but I will tell you the income level it indicated is within 10% of the actual gambling winnings.

The issue I have with that, is there is basically no deduction of any losses whatsoever, and the ratio it is using between Oklahoma source income (gambling winnings) and my own income from my home state, means that I am unfairly getting taxed on part of my own income in a nonresident state!  Complete crap!  If this wasn't the case, the Oklahoma deduction (capped at $17,000) would take more of tax burden away than what it calculates.  

I think I may need to talk to an actual lawyer in this case because it is one thing to tax fairly on the income minus deductions, but completely another to either:
1.) Not explain forms enough for someone (including tax professionals to enter correctly) and tax more on the average person's lack of understanding
2.) Use shady formula's on someone who does input the information correctly, but still calculates more of a tax bill than seems fair or legal.

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