These frequently asked questions and answers are provided for general information only and should not be cited as any type of legal authority. They are designed to provide the user with information required to respond to general inquiries. Due to the uniqueness and complexities of Indian law and federal tax law, it is imperative to ensure a full understanding of the specific question presented, and to perform the requisite research to ensure a correct response is provided.
Box 3 on Form W-2G, Certain Gambling Winnings, requires a "wager code". Where can they be found?
Form W-2G PDF, Box 3, requires the applicable type of wager code for each Form W-2G the casino issues. The wager codes and their definitions are as follows:
| Code | Category |
|---|---|
| 1 | Horse racetrack (or off-track betting of a horse track nature) |
| 2 | Dog racetrack (or off-track betting of a dog track nature) |
| 3 | Jai-alai |
| 4 | State-conducted lottery |
| 5 | Keno |
| 6 | Bingo |
| 7 | Slot machines |
| 8 | Poker winnings |
| 9 | Any other type of gambling winnings |
Form W-2G wager codes are required to electronically file through the Filing Information Returns Electronically (FIRE) System and are located in Publication 1220, Specifications for Filing Form 1098, 1099, 5498, and W2-G Electronically PDF. Refer to Part C Record Format specifications and Record Layouts, Sec. 3 Payee “B” Record.
What is a Form W-9 and when is it applicable?
Form W-9, Request for Taxpayer Identification Number and Certification PDF, is used by a U.S. person (including a resident alien) to give their correct TIN to the person requesting it, and when applicable, to:
- certify the TIN you are giving is correct (or you are waiting for a number to be issued),
- certify you are not subject to backup withholding, or
- claim exemption from backup withholding if you are an exempt payee.
- certify that FATCA code(s) entered on the form indicating exemption from the FATCA reporting, is correct.
Are per capita distributions by a tribe generally subject to federal income tax withholding?
There are generally two types of "per capita" payments, only one of which is subject to required federal income tax withholding.
- When the tribe or any other payor distributes net revenues from their class II or class III gaming activity, income tax withholding is required;
- Distributions that are not from Class II or Class III gaming activity do not require income tax withholding;
If the tribal member does not provide a Social Security number (SSN), or if the IRS notifies the tribe that the SSN provided is incorrect or that another problem as described in Internal Revenue Code section 3406(a)(1) exists, backup withholding is required.
When is truncation of payee identification number on paper statements allowed?
To reduce the risk of identity theft, you may truncate a payee's identification number on the statements you give to them on paper or in electronic format (usually designated Copy B). This includes the following:
- Substitute and composite substitute statements
- Form 1095-C
- Form 1098 series (except Form 1098-C)
- Form 1099 series
- Form 5498 series
If you truncate an identification number on Copy B, the other copies you give the payee should also include the truncated number.
In the following instances, you may replace the first five digits of the nine-digit number with an asterisk (*) or X on most payee statements:
- Payee’s Social Security number (SSN)
- Individual taxpayer identification number (ITIN)
- Employer identification number (EIN)
- Adoption taxpayer identification number (ATIN)
Remember:
- You may not truncate on any forms filed with the IRS (Copy A) or with state or local governments.
- You cannot truncate your own identification number.
- These rules do not apply to Form W-2.
A payee is any person who is required to receive a copy of the form. For some forms, the term payee will refer to beneficiary, borrower, debtor, insured, participant, payer, policyholder, recipient, shareholder, student or transferor.