If you choose to donate, split, or assign your Lottery winnings, in whole or in part, the value is taxable to the recipient in the same way as it is for federal income tax purposes. The New Jersey Lottery permits donating, splitting, and assigning Lottery proceeds to someone else or to a charity.This standard for taxability applies to both residents and nonresidents.However, if that person won the Lottery once and received a prize of $11,000, the winnings would be taxable. For example, if a person won the New Jersey Lottery twice in the same year, and the winning prize amounts were $5,000 and $6,000, these winnings would not be subject to New Jersey Gross Income Tax.The individual prize amount is the determining factor of taxability, not the total amount of Lottery winnings during the year. New Jersey Lottery winnings from prize amounts exceeding $10,000 are taxable. Each company is required to file for a refund of the tax withheld, if applicable. Both taxpayers would be subject to the 5% withholding because the total amount of the prize exceeded $10,000.Ĭompanies that obtain the right to Lottery payments from the winner and receive Lottery payments are also subject to New Jersey withholdings. For example, if two people win a New Jersey Lottery prize of $14,000 and split the proceeds equally, $7,000 of income is taxable to each person and is subject to the 5% withholding rate. New Jersey Income Tax withholding is based on the total amount of the prize won. 8% for Lottery payouts over $10,000, if the claimant does not provide a valid Taxpayer Identification Number.
8% for Lottery payouts over $500,000 and.The withholding rates for gambling winnings paid by the New Jersey Lottery are as follows: If a prize is taxable (i.e., over $10,000), the entire amount of the payout is subject to withholding, not just the amount in excess of $10,000. The rate is determined by the amount of the payout. New Jersey Income Tax is withheld at an amount equal to three percent (3%) of the payout for both New Jersey residents and nonresidents ( N.J.S.A.
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