The proposed bill, currently awaiting West Virginia Governor Jim Justice’s signature, suggests alterations in the taxation regulations surrounding casino and lottery winnings and losses.
House Bill 2821 in West Virginia now allows residents to deduct gambling losses from their winnings when filing their state taxes. This new legislation ensures that taxpayers using simple tax forms have the same chance to deduct gambling losses as those who itemize deductions.
Unfortunately, exceeding winnings with losses is not feasible and it is crucial to keep comprehensive records of all losses throughout the year.
House Bill 2821 could lower tax burden for hundreds of thousands
West Virginia’s online gambling industry reached its peak in February, as online casinos processed an astonishing $367.6 million in bets. This remarkable amount marks the most successful four-week period ever documented in the state’s online gambling history.
Delegates Jarred Cannon, Brandon Steele, Shawn Fluharty, Clay Riley, William Nestor, Erikka Storch, and Paul Espinosa, who are sponsors of House Bill 2821, endorse its straightforward language.
Effective January 1, 2025, individuals will be required to pay taxes on any profits derived from gambling and lotteries, treating them as personal income. When determining gains, individuals can subtract their gambling and lottery losses up to the amount they won in that specific year. Nevertheless, the expenses and costs linked to engaging in gambling and lotteries cannot be deducted. Taxpayers must maintain meticulous records to substantiate their losses in order to claim them. Ultimately, it is the responsibility of individuals to prove their losses.
West Virginia taxpayers now have the chance to lower their tax burden by deducting their gambling losses from their winnings before submitting their tax returns, benefiting hundreds of thousands of individuals.
It is the players’ responsibility to keep accurate records of their losses in order to prevent them from exceeding their winnings.
HB 2821 levels the playing field
It is clear that HB 2821 permits all gamblers to subtract their losses from their winnings before treating them as extra income on their tax returns. It will be interesting to see how many states will follow West Virginia’s position on this issue.
Considering the significant benefits that states derive from gamblers participating in regulated and licensed gambling facilities, it is only logical for them to offer tax relief to players.
Play WV states that tax revenue from state lotteries, regulated retail, and online casinos plays a crucial role in funding programs aimed at improving the state’s quality of life. Since gamblers actively contribute to infrastructure improvements and support educational institutions through their participation, it is unreasonable for the government to penalize them.
This situation is a triple win for all involved. Firstly, players receive tax relief on their gambling losses. Secondly, the state benefits from the tax revenue generated by casinos. Lastly, the casinos enjoy increased profits as more patrons engage in their games.
Since March 22, the bill has been on the governor’s desk, waiting for his signature.
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