How does it work if you wanted to play the lottery in a state you’re not living in? Is it possible? How does it work in terms of taxes? Where does the payout come from? Here’s a look into how the process works.
Is it Possible?
Are you allowed to cross state lines in order to purchase a lottery ticket? The short answer is yes. An article written for rivrapp.com states, “There’s no rule against it. If you’re on vacation in another state, you can play in that state. If you live near a state border and can easily reach a store in the other state, you can play. Even people from overseas can buy tickets too! So you do NOT have to be a state resident to be able to play in that state, or indeed any state.” This means that if your state does not host a lottery, you can still play in another state. Location doesn’t have to be a contributing factor in whether or not you participate.
How do lottery taxes work? Does playing the lottery in another state get you out of paying your own state taxes on the money? (Wouldn’t that be nice?) Are you responsible for paying taxes in both states? It turns out that you are. However, you wont be responsible for paying FULL taxes in both states. The above mentioned article explains, “Because you will have already paid a chunk of state tax to the ‘other state’, your state will take this into account. So you only have to pay the ‘difference’. That is, the extra that you thought you were saving by playing in the neighbor state!” In regards to smaller winnings, the article goes on to say, “Then there are the smaller wins of course – taxes are due on these too of course, but not deducted in advance. You should be entering these as “other income” on your IRS returns anyway, but what if they are wins from another state? And can you deduct the cost of what you spent on tickets from those winnings?” It’s always a great idea to consult tax professionals when filing your taxes. Navigating the ins and outs of winning money can be difficult.
Finally, who pays the prize money? The state where you bought the ticket is responsible for giving you the payout. Even if it’s a multi-state game, wherever you purchase your ticket is who you can expect to get your money from. Additionally, for smaller prizes you’ll have to claim them in a store that resides in the state where you bought the ticket. You can’t take it across state lines and expect any old place to pay out.
Your location has very little to do with whether or not you can play the lottery. If you want to play, play! Take a trip and be resourceful. You’ll easily be able to find places to purchase tickets.