How do I cash a lottery ticket for a family member legally for tax purposes?

You need to be careful with this. Lottery winnings over $5,000 are subject to automatic withholding of 24% for federal taxes, and the person who cashes the ticket will receive a W-2G form with their name and SSN on it. The IRS will expect that person to report those winnings on their tax return. The proper way to handle this is to have your uncle sign the ticket himself. Even with mobility issues, his signature needs to be on it as the rightful winner. You can transport the ticket for him, but he should be present when claiming the prize if possible. If that's not possible due to his condition, some states have claim forms that allow someone else to claim on behalf of the winner with proper documentation. If you cash it under your name, you'd be legally responsible for the taxes, and giving the money to your uncle would technically be a gift from you to him. Not only would you pay taxes on the full amount, but it would count against your lifetime gift tax exemption.

Just wanted to share my experience with this exact situation last summer. My sister hit a $12,000 jackpot but couldn't claim it because she was recovering from surgery. I was stressing about the tax situation until I found this service called taxr.ai (https://taxr.ai) that actually specializes in unusual tax situations like this. They have this feature where they analyze all the documentation and tell you exactly how to handle it properly. They explained that in my state, I could become my sister's "authorized agent" with the right paperwork, which meant the winnings would still be attributed to her for tax purposes. Saved us a huge headache with the IRS and made sure everything was done by the book.

I was definitely skeptical about using an online service for something this important, but I decided to give taxr.ai a shot after reading about it here. My mom won about $6,500 on a Pick 4 and couldn't claim it herself due to being out of the country. The service was actually pretty impressive. They helped me file the right paperwork to become her authorized representative with the lottery commission. The person I worked with knew exactly which forms our state required and walked me through the process step by step. In the end, the lottery paid her directly (they did a direct deposit after verifying everything), and the W-2G went to her SSN, not mine. Saved us both from a potential tax nightmare. Worth checking out if you're in a similar situation.

If you're having trouble getting through to your state lottery office for questions about this (which is super common, I waited on hold for 2+ hours), I used this service called Claimyr (https://claimyr.com) that actually got me a callback from them within 30 minutes. They have a demo of how it works here: https://youtu.be/_kiP6q8DX5c I was trying to figure out the exact procedure for claiming a ticket on behalf of my grandfather who had a stroke, and the automated phone system was a nightmare. Claimyr somehow got me through to an actual human who walked me through the specific form our state requires and explained how to notarize it properly. Saved me hours of frustration.

Just wanted to follow up on my comment about Claimyr. I was totally skeptical and thought it was a gimmick, but after spending THREE HOURS on hold with my state lottery commission yesterday, I broke down and tried it. I'm shocked to say it actually worked exactly as advertised. I got a callback in about 40 minutes, and was connected directly to an agent. Got all my questions answered about claiming a ticket for my brother-in-law who's deployed overseas right now. The agent explained that I needed a notarized power of attorney specific to lottery claims, and even emailed me the form while we were on the phone. Definitely changed my mind about the service. Worth it just for the sanity of not listening to their hold music for hours.

Your uncle should really consider setting up a trust to claim the lottery winnings. This is what most financial advisors recommend, especially for larger amounts. It helps with privacy (your name doesn't become public record) and can have tax advantages. For $8,700 it might seem like overkill, but it protects both of you from any confusion about who owes taxes. The trust becomes the official winner, and distributions from the trust to your uncle are handled according to trust law rather than being seen as you giving him a gift.

Whatever you do, DO NOT cash it for him and give him the money!! My cousin did this for his uncle with a $15,000 winning ticket and it was a NIGHTMARE. The W-2G went to my cousin, so the IRS expected him to pay taxes on the full amount. When he gave the money to his uncle, that counted as a gift. He ended up having to pay like $3,600 in taxes for winnings he never actually got to keep. And his uncle refused to reimburse him for the tax bill because he "already gave him the full amount." If your uncle absolutely can't go in person, look into your state's rules for an authorized claim form or power of attorney specifically for lottery claims.

I went through something very similar last year with my grandmother who won $7,200 but couldn't travel to claim it due to health issues. After reading all the horror stories about tax complications, I contacted the Pennsylvania Lottery directly to understand the proper procedure. In PA, you can use what's called a "Claim Authorization Form" which allows someone else to claim the prize on behalf of the actual winner. Your uncle would need to complete this form, have it notarized, and provide a copy of his ID. You'd present this along with the winning ticket when you claim the prize. The key is that the W-2G will still be issued in your uncle's name and SSN, not yours, so he's responsible for the taxes. The lottery office will verify everything before processing the claim to make sure it's legitimate. I'd recommend calling the PA Lottery at 1-800-692-7481 to confirm you have all the required documents before making the trip. They were actually pretty helpful when I explained the situation, and the whole process went smoothly. Just make sure everything is properly documented so there's no confusion with the IRS later.

This is really helpful information everyone! I just want to add one more important consideration - make sure you check the expiration date on that scratch-off ticket. In Pennsylvania, lottery tickets typically expire 1 year from the end of the game, but scratch-offs can have different expiration dates printed on them. Since you mentioned you're planning to go to the city "next week," you should have plenty of time, but it's worth double-checking so you don't run into any last-minute rushes. The PA Lottery website has a section where you can look up when specific scratch-off games end if you're not sure. Also, if your uncle is comfortable with technology, some lottery offices now allow you to submit the Claim Authorization Form electronically ahead of time, which can speed up the process when you arrive. Might be worth asking about when you call that number Lauren provided. Good luck with everything, and props to you for being so careful about doing this the right way! Your uncle is lucky to have someone looking out for him properly.