I have a W2-G from 50/50 raffle winnings of $3600. On the form, Box 1 is empty, and Box 7 lists the winnings of $3600. Is the form wrong? Should Box 1 also list $3600?

[LisaBr · Accepted solution]

Your-W2-G should be correct.  Box 1 is filled in if there are payments of $600 or more if the payment is at least 300 times the wager.  Box 7 is entered for additional winnings from identical wagers.

If you only won $3600, you do not want to report it twice.  Box 7 is a valid income line.  Adding the information in Box 1 would double the income.

According to the IRS, "Winnings from identical wagers (for example, two $2 bets on a particular horse to win the same race) are added together for purposes of the reporting and withholding requirements. Also, winnings from identical wagers that aren't part of the payment for which the Form W-2G is being prepared are added together for purposes of withholding to determine if the total amount of proceeds from identical wagers is more than $5,000."

[From:  https://www.irs.gov/pub/irs-pdf/iw2g_17.pdf]

[rtreut]

Thanks for your reply. In this instance, the winnings were 300x the wager (so long as the "amount wagered" is defined by the cost of the raffle ticket that won, in this instance a $1 ticket. I bought $20 worth of tickets, but only one was the winner, obviously.) I'm not sure such a raffle should be considered an "identical wager". It seems to me that $3600 should be in Box 1 but not Box 7. What do you think?

[LisaBr]

The way I understand the issue, I think so too.  However, we never want to change a tax form sent to the IRS on our own.  I would check with the issuer to either issue a corrected form or explain why.  I thought that box 7 would have "an additional" amount, with box 1 having a figure entered too - totaling to $3600.  I can tell you that both boxes are income reporting boxes that will end up correctly on your tax return.

[rtreut]

Following up here. The Turbo Tax interface isn't counting Box 7 as reported income. Only Box 1. As I move through the process it tells me I need to review my W2-G and that Box 1 cannot be empty. I don't want to contradict the W2-G I received, but also want to be sure I'm accurately reporting this income. Can you help?

[LisaBr]

I'm just back from "my weekend".  I'm going to take a look at something and get back to you.  Will be today.

[LisaBr]

Sometimes we need to work around that smart computer programing.  Here's a couple of work-arounds that will give you the same result for the IRS.  1.  Put the entire amount in Box 1 and nothing in Box 7.  2.  Since, Box 7 is supposed to be an additional income amount.  Put 50% ($1800) in Box 1 and the other 50% ($1800) in Box 7.  This is a reasonably explainable change to the W2-G should the IRS question.  However, the result is you are fully reporting the income received.

[rtreut]

Thanks very much for following up. I reached out to the issuer of the form and they confirmed it's correct. I believe Box 1 is empty because my full wager of $20 is considered and my winnings were less than 300x that amount (<$6000) and so not reportable in Box 1. I'll try to get the program to accept one of your suggestions above. Thank you!

[LisaBr]

I wondered about that Box 1.  Your welcome.