Posted by SuperCat (IL, KY) on July 18, 2003 at 16:01:41:
Anybody that blindly follows tax advice on this site deserves the troubles that are sure to come. We currently operate in 17 states and have researched the law extensively with our CPA. Just a quick yahoo search turned up the following conflicting statements from the state lotteries:
If you are not a resident of Minnesota, the 7.25 percent Minnesota income tax is still deducted from your check. A professional tax adviser can help you determine the best way to handle your federal and state tax obligations.
Yes, as of July 1, 2002, the Hoosier Lottery is required by law to withhold 3.4% for Indiana state income taxes on prizes over $1200 and to withhold 27% for federal income taxes on all prizes over $5,000. Additional income taxes may be owed depending on the individual winner’s tax bracket. If a player wins a Hoosier Lottery prize but resides in another state, taxes for player’s state of residence also may apply…
If you are not a resident of Iowa, you are required to file an Iowa return if your Iowa source income is $1,000 or more and your gross income (from all sources, not just Iowa) is $9,000 or more if you’re single or $13,500 or more for married filers.
Even if your Iowa source income is less than the amount required to file a return, you may want to file an Iowa return if Iowa tax has been withheld from your winnings. You may be eligible for a refund of the tax withheld on your winnings. You cannot receive a refund unless you file a return.
Failure to file an Iowa individual income tax return, if required, may subject you to penalty and interest in addition to the tax owed.