Administrative Code

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Virginia Administrative Code
Title 23. Taxation
Agency 10. Department of Taxation
Chapter 140. Income Tax Withholding
7/19/2024

23VAC10-140-281. Income taxation of lottery prizes.

A. Lottery prizes subject to taxation. Any lottery prize of $600 or more shall be subject to Virginia income tax. To the extent included in federal adjusted gross income, any lottery prize of less than $600 shall be subtracted from federal adjusted gross income in determining Virginia taxable income. No subtraction is allowed for the first $599 of a prize of $600 or more.

B. Persons subject to taxation. The following persons shall be subject to Virginia income taxation at the current applicable rate as determined in Chapter 3 of Title 58.1 of the Code of Virginia on lottery prizes subject to taxation under subsection A above:

1. Residents;

2. Nonresidents; and

3. Part-year residents.

C. Multiple winners. When a lottery prize is claimed by a group, family unit, club or other organization, the multiple winners will be required to (i) file an Internal Revenue Service Form 5754, "Statement by Person(s) Receiving Gambling Winnings" with the Lottery Department, or (ii) attach a statement to their federal income tax return.

The statement should include the following information for each individual, person, or entity who receives a portion of the lottery prize:

1. The name;

2. Social security number, or employer's federal identification number; and

3. Amount of the winnings each individual person or entity received from the lottery prize.

The amount of the lottery prize included in federal adjusted gross income for each individual person or entity shall be subject to state income taxation. Each individual person's or entity's share of $599 or less shall be subject to state income taxation if the aggregate amount of the prize prior to distribution among the group, family unit, club or organization is $600 or more.

D. Estimated tax. Taxpayers may be required to pay estimated taxes in the event that a lottery prize is not subject to withholding or if withholding is insufficient. In accordance with §§ 58.1-490 through 58.1-496 of the Code of Virginia, estimated tax is due if the estimated tax liability on all income subject to state taxation exceeds a taxpayer's total withholding and other credits by more than $150.

Statutory Authority

§§ 58.1-203 and 58.1-4006(B)(1) of the Code of Virginia.

Historical Notes

Derived from VR630-6-4006 § 2, eff. November 21, 1990.

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