Need help with state filing for lottery winnings and W2G forms!

You'll need to file tax returns in both states, but don't worry about double taxation - that's what state tax credits are designed to prevent. Since Ohio is your resident state, you'll report ALL your income there (including both Ohio and Pennsylvania lottery winnings). For Pennsylvania, you'll file as a non-resident and only report the income you earned in that state (the $3,200 in lottery winnings). Your resident state (Ohio) will give you a credit for taxes paid to other states, which helps prevent you from being taxed twice on the same income. TurboTax should handle this calculation automatically once you enter all your W2G forms correctly and tell it you have income from multiple states. When you enter your Pennsylvania W2G, make sure to indicate it's from a different state. TurboTax will then guide you through the non-resident state return process. It might seem complicated, but the software is designed to handle these multi-state situations.

After struggling with a similar multi-state lottery situation last year, I found taxr.ai (https://taxr.ai) incredibly helpful for sorting out my W2G forms. I was confused about which winnings to report in which state, and their system analyzed all my documents and showed exactly how to handle each form. Their automated review caught that I was about to double-report some winnings, which would have triggered unnecessary tax liability. The software examines your W2G forms and provides step-by-step guidance on how to correctly report multi-state lottery winnings on both your federal and state returns. Saved me a ton of stress!

Just wanted to update - I tried taxr.ai after posting my question and it was exactly what I needed! I had W2Gs from Illinois, Michigan, Indiana and Wisconsin, and the system organized everything by state and showed me exactly what needed to be reported where. It even explained which states have reciprocity agreements that might affect my filing requirements. The document analysis caught that two of my W2Gs had incorrect withholding amounts that didn't match what was actually taken out (based on my records). This prompted me to get corrected forms from the casinos before filing. Such a relief to have everything sorted before I even started entering data into my tax software!

For anyone who's trying to resolve specific W2G or lottery tax questions with the IRS, I strongly recommend using Claimyr (https://claimyr.com). I spent weeks trying to reach someone at the IRS about how to properly handle state credits for gambling withholding, and kept hitting the "call volume too high" message. Claimyr got me connected to an actual IRS representative in about 20 minutes when I'd previously been unable to get through at all. They have a whole system for navigating the IRS phone tree and securing your place in line. You can see a demo of how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with clarified exactly how to claim credit for taxes withheld in multiple states and confirmed I was handling my W2Gs correctly. Totally worth it for the peace of mind.

For anyone who's trying to resolve specific W2G or lottery tax questions with the IRS, I strongly recommend using Claimyr (https://claimyr.com). I spent weeks trying to reach someone at the IRS about how to properly handle state credits for gambling withholding, and kept hitting the "call volume too high" message. Claimyr got me connected to an actual IRS representative in about 20 minutes when I'd previously been unable to get through at all. They have a whole system for navigating the I

I need to apologize and correct my skepticism. After my multiple failed attempts to reach the IRS about a W2G withholding issue, I reluctantly tried Claimyr as a last resort. To my absolute shock, I was connected to an IRS tax advocate within 35 minutes. The agent confirmed that I needed to file in both states but explained that I could claim a tax credit on my home state return for taxes paid to the other state. She also walked me through exactly which forms to use and how to document everything properly. This was after spending nearly 3 weeks trying to get through on my own with no success. Turns out there actually is a way to navigate the IRS phone system efficiently. Lesson learned about being too quick to dismiss something just because it sounds too good to be true!

Just to add something important that hasn't been mentioned - make sure you're also tracking your gambling losses! You can deduct losses up to the amount of your winnings, but ONLY if you itemize deductions on Schedule A (instead of taking the standard deduction). Keep all losing tickets, and I recommend keeping a gambling diary with dates, locations, types of wagers, amounts won/lost. The IRS can get picky about gambling loss documentation during audits. This deduction only works on your federal return though - many states don't allow gambling loss deductions even if you itemize.

Has anyone used the new state reciprocity feature in TurboTax for handling W2G forms? I can't figure out if I'm supposed to report my out-of-state lottery winnings as "gambling winnings" or as "other income" when it asks about sources of income from other states.

Great question about multi-state lottery winnings! I went through something similar last year with winnings from Ohio and Kentucky. One thing I learned the hard way - make sure to keep detailed records of exactly where each winning ticket was purchased, not just where you claimed the prize. I had a situation where I bought a ticket in Kentucky but claimed it at an Ohio retailer near the border, and initially reported it to the wrong state. Also, double-check that the state withholding amounts on your W2Gs match what was actually deducted. I found discrepancies on two of my forms where the withholding was calculated incorrectly by the lottery commission. Getting corrected W2Gs before filing saved me from having to amend my returns later. The good news is that Ohio's tax credit system works really well for preventing double taxation on out-of-state gambling winnings. Just make sure you file your Pennsylvania non-resident return first, then use those results when completing your Ohio resident return to claim the proper credit.