Here’s a question that came our way this week about the withholdings that apply to lottery prizes won in Iowa. The specifics depend on the amount of the prize involved. Here are the details:
The Iowa Lottery doesn’t apply withholdings to prizes of $600 or less. By law, state withholdings of 5 percent apply to lottery prizes of more than $600. And federal withholding of 24 percent applies to prizes of more than $5,000.
All winners of prizes of more than $600 will receive a Federal Form W2-G from the Iowa Lottery. The form shows the prize you won and all taxes withheld. You’ll need to include that form and the details from it when you file your income taxes for the year that you claimed your prize.
Withholdings are designed to cover the taxes owed – some winners may get some of it back, or they may have to pay more, depending on their income level outside of winning a lottery prize.
For prizes won in 2021, the lottery will mail out W2-G Forms to our winners no later than Jan. 31 next year. If you’ve won a prize of more than $600 and you’ve moved since you claimed the prize, be sure to contact us at 515-725-7900 or [email protected] to provide us with your updated address. That way we’ll mail your W2-G form to the right place.
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