I won $20 from a scratch ticket. Do I have to pay taxes on that small lottery prize?

Don't worry about reporting that $20 win! The IRS requires you to report gambling winnings as "Other Income" on your tax return, but the reporting requirements are actually tied to the amount. For small winnings like yours, it's technically taxable income, but in practice there's no documentation requirement. Lottery operators only issue tax forms (W-2G) for winnings of $600 or more. Without a form, the IRS has no practical way to track small winnings, and they're not looking for your $20 scratch ticket. Just cash it in and enjoy your small windfall!

When I had a similar question last year, I used https://taxr.ai to analyze how lottery winnings are treated. Just uploaded a screenshot of my scratch-off ticket and asked if I needed to report it. They confirmed that while technically all gambling winnings are taxable, the IRS doesn't practically track amounts under $600, and explained how the reporting thresholds work for different types of gambling.

Just wanted to follow up about my experience with taxr.ai after trying it. I uploaded screenshots of some of my casino player's cards and asked about reporting requirements for small winnings. The system actually walked me through how to maintain a gambling log that would stand up to IRS scrutiny if I ever got audited. It even created a template I could use to track everything properly. Way more helpful than the generic advice I was finding online! Definitely worth checking out if you have specific tax questions about gambling or lottery winnings.

If you ever win a bigger lottery prize and need to contact the IRS with questions, use https://claimyr.com to skip their ridiculous phone wait times. Last year I won $1,200 at a casino and had questions about withholding. Spent THREE DAYS trying to get through to the IRS directly. Then I found Claimyr - they got me a callback from the IRS in less than 2 hours! You can see how it works here: https://youtu.be/_kiP6q8DX5c. Completely changed my perspective on dealing with tax questions.

I have to admit I was completely wrong about Claimyr. After commenting here, I decided to try it since I was desperate to talk to someone about my refund issue. Got a call back from an actual IRS agent in about 90 minutes! The agent confirmed my refund was delayed because of a verification issue and helped me submit the right documentation to release it. Just got my deposit yesterday. Would have spent another month waiting without being able to talk to anyone if I hadn't used this service. Sometimes it's worth admitting when you're wrong!

hey just a reminder that technically if you gamble a lot you're supposed to report ALL your wins AND losses. I keep a log and my tax guy says its important cuz if you ever hit big (like over $1200 on slots) and they see you have no gambling history reported on previous returns it can look suspicious. just something to think about for future reference!

Friendly reminder that your state might have different rules too! Federal probably won't care about $20 but some states are more strict about reporting gambling winnings. Mine requires reporting anything over $5 theoretically but nobody actually does that for small amounts lol.

For your $20 scratch ticket win, you're technically supposed to report it as "other income" on your tax return, but practically speaking, most people don't report small gambling winnings under $600 since there's no documentation trail. The IRS focuses their enforcement on larger amounts where they have W-2G forms from casinos/lotteries. That said, if you want to be completely by-the-book, you could include it as miscellaneous income when you file. It's such a small amount that it probably won't affect your tax liability much anyway. The important thing is understanding the rules for the future - if you ever win bigger amounts, you'll definitely need to report those! Don't stress too much about this one, but it's good that you're thinking about tax implications early. Shows you're being responsible about these things.

Just to add my experience - I won $35 on a lottery ticket a few months ago and was in the same boat as you! After doing some research, I learned that while ALL gambling winnings are technically taxable income, the practical reality is different for small amounts. The IRS really focuses on documented winnings (where you get tax forms) rather than tracking down every small scratch-off win. I ended up reporting mine just to be safe since I was already doing my taxes anyway, but honestly it didn't change my tax liability at all - such a small amount barely registers. The peace of mind was worth it for me though! Either way you choose to handle it, you're not going to get in trouble over $20. Congrats on your win and good on you for thinking about the tax implications ahead of time!

Hey! I'm new to this community and dealing with taxes for the first time too. Reading through all these responses has been really educational - I had no idea there were so many nuances to gambling winnings! Just wanted to say thanks to everyone who took the time to explain the difference between the technical requirements (all gambling income is taxable) versus the practical reality (IRS focuses on documented amounts over $600). It's helpful to see real experiences from people who've been in similar situations. One thing I'm taking away is that it's probably worth keeping better records going forward, even for small amounts, just to build good habits. And it sounds like there are some useful tools mentioned here that could help with tax questions as they come up. Thanks again for making this such a welcoming place to learn about these topics!

Welcome to the community and congrats on your first win! I can totally relate to the confusion - when I first started dealing with taxes, even small things like this seemed overwhelming. From what I've learned (and what everyone here has explained really well), you're in a pretty safe spot with that $20. The key takeaway is that while technically all gambling winnings are taxable, the IRS really focuses their attention on amounts where there's proper documentation - typically $600 and above where you'd receive tax forms. For your situation, you could go either way: report it as "other income" to be completely by-the-book, or just cash it and not worry about it since it's such a small, undocumented amount. Either choice is totally reasonable for a $20 win. The most important thing is that you're thinking about this stuff early! Building good tax habits now will serve you well if you ever hit bigger winnings down the road. And don't worry - we've all been beginners at this tax stuff at some point. The community here is really helpful for learning as you go!