Fantasy sports winnings are typically not reported on IRS Form W-2G because this form is generally used for reporting gambling winnings from lotteries, casinos, horse racing, and other traditional gambling activities. However, fantasy sports are usually classified as games of skill rather than gambling, which means they are often reported differently for tax purposes.
How Are Fantasy Sports Winnings Reported?
Instead of Form W-2G, fantasy sports winnings are generally reported on Form 1099-K or Form 1099-MISC, depending on the payout method:
- Form 1099-K – If you received your winnings through a third-party payment processor (e.g., PayPal, Venmo, or a credit card), you may receive a 1099-K if your winnings exceed $600.
- Form 1099-MISC – If the fantasy sports platform pays you directly (e.g., by check or direct deposit), they may issue a 1099-MISC if your winnings exceed $600.
Even if you do not receive a tax form, all winnings are still taxable and must be reported on your tax return.
Where to Report Fantasy Sports Winnings on Your Tax Return
- If you participate in fantasy sports casually, report your winnings as “Other Income” on Schedule 1 (Form 1040), Line 8.
- If you play fantasy sports professionally (as a business), report your income and expenses on Schedule C (Form 1040) as self-employment income.
Can You Deduct Fantasy Sports Losses?
- If you are a casual player, you cannot deduct losses.
- If you are a professional player, you can deduct related expenses (e.g., entry fees, internet costs) on Schedule C, but you may still be subject to self-employment tax.
Conclusion
Fantasy sports winnings are not reported on Form W-2G but may be reported on Form 1099-K or 1099-MISC if they exceed $600. Regardless of whether you receive a tax form, all winnings are taxable and must be reported.
