I also won money from the casino on a cruise I took, would I need to pay state taxes on that?
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.
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??
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.
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?
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?
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-personal-tax-products">https://ttlc.intuit.com/questions/1908857-state-forms-availability-table-for-turbotax-individual-personal-tax-products</a>
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.
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</a>
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.
@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.
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. 😉
@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.
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.
@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.
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.
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.
In addition to the above information, I did a test within Turbo Tax using the exact same method to produce the tax matching the 2-D form I did manually in a PDF file.
I changed my income to something higher while leaving all else that gets transferred to the Oklahoma form the same.
Guess what it did? The tax for Oklahoma went UP! That's right...I changed nothing but my own job income in Turbo Tax, and the amount of Oklahoma tax due WENT UP!
It actually went up higher than the tax that corresponds to the income level indicated by the amount of theoretical gambling winnings! Definitely will speak to a lawyer about this! That cannot be legal!
FYI, here are the rates for single and joint filing respectively...
In 2018, only after my TAX PREPARER OF 5 YEARS had completed my FEDERAL AND STATE RETURNS BOTH... & I had paid ALL TAXES MY PREPARER DOCUMENTS SHOWED OWED.
Months later.... after OKLAHOMA received their STATE TAX from me PAID IN FULL...
as documents of TAX PREOARER SHOWED OWED.
OKLAHOMA SENT ME A NOTICE.
Oklahoma wanted more money.
MY OKLAHOMA TAX WAS SOLELY CASINO WINS.
I PHONED OKLAHOMA TAX COMMISSION. I asked DID YOU RECEIVE MY PAYMENT FOR MY FEDERAL TAXES?
Rep said "Yes."
I said than your agency sent me in error A NOTICE OF OWING OKLAHOMA MORE TAX.
Rep paused so long I had to ask "Are you still on phone?"
Rep repiled "I'm trying to see why we would send you such a notice. You paid your tax." Than asked me to hold.
Came back. Rep tells me OKLAHOMA WANTED ME TO PAY THEM AT THE TIME I WON THE CASINO WIN, IN THAT QUARTER.
I said, THAT IS RIDICULOUS!!
I DON'T OWE TAXES UNTIL END OF YEAR ON CASINO WINS. I PAID WHAT PREPARER DOCS SHOWED OWED. NOW OKLAHOMA SUDDENLY WANTS MORE MONEY, AND SOMEHOW FOR ME TO HAVE MAGICALLY KNOWN OKLAHOMA WOULD WANT THAT MONEY INSTEAD OF SENDING OUT A "TAX DECLARATION" OF OKLAHOMA CHARGING CASINO WINNERS INTEREST IF DONT PAY IN QUARTER THEY WIN... SMELLS... REEKS OF CORRUPTION!!
I WILL TALK TO MY TAX PREPARER.
& I DID.
MY TAX PREPARER LOOKED OVER MY RETURNS, STATED I OWED EXACTLY WHAT THEY PREPARED IN FEB 2018 ON MY 2017 WINS... I DONT OWE OKLAHOMA ANYTHING MORE. JUST IGNORE THEM.
I DID. I IGNORED OKLAHOMA TRYING TO SHAKE ME DOWN FOR MORE MONEY.
TODAY... NOV. 09, 2020 OKLAHOMA TAX COMMISSION USED SOME ATTORNEY OFFICE CLEARLY AS AS CORRUPT AS OKLAHOMA IS... TO ALSO ATTEMPT TO SHAKE ME DOWN FOR MORE MONEY!!
SHAMEFUL WHAT OKLAHOMA TAX COMMISSION ATTEMPTS TO DO TO OUT OF STATE PLAYERS; THEY KNOW OUR ADDRESSES, AREN'T THEY LIABLE TO MAIL US TAX CODES SHOWING US THEIR "RULES" THEY WANT US TO FOLLOW (THEY INTEND TO SHAKE DOWN CASINO WINNERS WITH INTEREST IS WHY THEY WON'T BE FULLY TRANSPARENT WITH AMERICANS WINNING AT OKLAHOMA CASINOS!!).
THEY SURE USE OUR ADDRESSES AFTER .. INTEREST IS THERE ... MMM HMMM.
THEIVES.
CORRUPT THEIVES.
we can't see your OK return or notice.
if your winnings were large enough the casino was probably obligated to withhold OK taxes so you would have owed nothing when you filed. every state with an income tax has different rules concerning withholding on casino, lottery, racetrack, etc. winnings.
when you got that notice you should have had your tax preparer call.
your tax preparer was wrong saying to ignore the notice. the issue on tax notices must be resolved in your favor otherwise the state or IRS will continue to come after you.
at this point I would suggest you have your tax preparer call to find out why you owe, he may have a better understanding of what the issue is ask for a law cite and then look into it.
you may have to pay the tax and then file a claim for refund - this is what can happen if you just ignore tax notices - I'm not saying OK is correct.
that collection agency will continue to come after you. they can levy your bank account, garnish your wages, put a lien on real estate that you might own, and more.
do nothing more at your own risk.
and I'm not sure what OK is saying about that "FEDERAL" payment that it said it received. OK is not the IRS and the IRS is not OK. so any federal payment should have gone to the IRS and the state payment to OK. if you sent the state payment to the IRS the check may have been destroyed and never got to OK. but can't be sure. you should research your records to see what happened to that payment and if the check cleared get a copy of the front and back. your tax preparer will need this if you have him call. until you can clear this issue in your favor, OK penalties and interest will continue to accumulate.
by the way did you have an OK tax liability in 201. I ask because to avoid withholding and/or estimated tax payments you must timely pay in 70% of 2018 tax or 100% of 2017 tax. so if you had no tax liability in 2017 no payments were required. also no payments were required if your tax liability was under $1,000 for 2018
why doesn't Oklahoma casinos collect taxes from jackpots as they are earned by out of state people and why doesn't oklahoma tax commission collect their taxes instead of hiring outside firms
Why have I never had to pay Oklahoma state taxes on my gambling winnings before this year?
You may not have had a filing requirement in prior years.
This year, you must have reported a Form W-2G showing gambling winnings of $1,000 or more from somewhere in Oklahoma.
You don’t state as much, but, based on this thread, I’m assuming you’re a non-resident of Oklahoma, and probably haven’t had any Oklahoma income except possibly from gambling. Lots of people cross the border into Oklahoma to do that.
However, there is a requirement to file an Oklahoma return for non-residents, when a certain income threshold is passed.
According to Who Must File – Nonresident in the 2021 Form 511-NR Oklahoma Individual Income Form for Nonresidents and Part-Year Residents Packet & Instructions:
Except as otherwise provided for in the Pass-Through Entity Tax Equity Act of 2019, every nonresident with Oklahoma source gross income of $1,000 or more is required to file an Oklahoma income tax return. A nonresident partner may elect to be included in a composite partnership return; see Rule 710:50-19-1.
Please see the instructions linked above for more information.
@Dlevans24
Thanks for your quick response. You are correct, I liv in Texas and only go to Oklahoma to visit the casino. I done this for years but I’ve never been advised to pay Oklahoma taxes for any gambling winnings until this year. I won a significant amount in 2020 but was not advised/informed to pay Oklahoma taxes on the winnings. I did include the winnings as income on my regular taxes but still was not made aware of Oklahoma tax requirements. I’m just wondering if this could come back as an illegal activity?
Something would need to trigger TurboTax to ask about filing an OK state tax return for gambling winnings. It is normally one of two ways. 1. The taxpayer enters a W2G that shows OK winnings in the state boxes. 2. Taxpayer indicates in the "My Info" section using the "Other state income" topic that they earned money from another state. Gambling Winnings is specifically mentioned there.
The taxpayer would subsequently enter the gambling winnings as "not reported on a W2G" in the federal interview. A non-resident return would be generated and the taxpayer would allocate the gambling winnings to the non-resident state for tax calculations.
If the state of OK receives data from another source that a taxpayer has earned income in OK that exceeds the reporting threshold they may contact that taxpayer for resolution.