1. Does Casino Winnings Qualify For Child Tax Credit Phase Out
2. Does Casino Winnings Qualify For Child Tax Credit 2019
3. Does Casino Winnings Qualify For Child Tax Credit 2018

An example of a popular question during tax season:

Do lottery winnings count as earned income for Social Security purposes? Lottery winnings are not considered earned income, no matter how much work it was purchasing your tickets. Therefore, they do not affect your Social Security benefits. Does winning the lottery affect my tax bracket? Winning the lottery can affect your tax bracket in a big way. Reporting Income. You must also report income you receive from interest, dividends, capital gain distributions, gambling winnings, disability income or unemployment income as taxable income. To qualify for the Earned Income Tax Credit, you must have some source of earned income. If you didn't work during the tax year.

“I became a professional poker player in June 2010. Prior to then, I was a full-time college student and earned no income. Since June, my net gambling winnings are small in amount. Do I still need to file a tax return?”

The answer: Probably.

There are many reasons why the answer is likely yes. One is because if income from self-employment for the year exceeds $400, the taxpayer must file. Another reason to file is the possible availability of the Earned Income Tax Credit (EITC). The EITC is available for some low income individuals, and may generate a refund, which is additional money in the taxpayer’s pocket.

To be eligible for the credit, the taxpayer must have:

• “earned income” and “adjusted gross income” less than a certain amount;
• a valid Social Security Number;
• filing status other than married filing separately;
• US citizenship or be a US resident alien;
• no foreign income;
• investment income less than a certain amount.

Regarding the “earned income” and “adjusted gross income” amounts, this IRS article provides a summary. For single taxpayers with no qualifying children, for example, earned income and AGI must both be less than $13,460 to be eligible for the credit for the 2010 tax year.

“Earned income” includes wages, salaries, tips, and other employee compensation, plus the amount of the taxpayer’s net earnings from self-employment. Thus, from my reading of the EITC statute, gambling winnings of professional gamblers IS considered “earned income,” but gambling winnings of recreational gamblers IS NOT considered “earned income.”

The credit amount is determined by a formula. If you believe you may qualify for the EITC for the 2010 tax year, be sure to read this IRS publication for further assistance.

To qualify for an Obamacare tax credit, you have to estimate your household income for the following year in your application. You can base this amount on your most recently filed tax return, taking into account any changes you expect for the following year. When you fill out your application, you must use your “modified adjusted gross income” (MAGI).

For the great majority of self-employed individuals, their MAGI is the same as their adjusted gross income (AGI), which is shown on line 37 of your IRS Form 1040. (If you use the shorter Form 1040EZ, your AGI is on line 4.)

Your MAGI consists of all your income minus certain deductions.

What You Add

To determine your MAGI, first add together all the following amounts:

• wages, salaries, tips
• net income from any self-employment or business (generally the amount of money you take in from your business minus your business expenses)
• taxable interest
• taxable amount of pension, annuity, or IRA distributions
• all Social Security benefits, including disability payments
• tax-exempt interest (for example, from government bonds)
• capital gains
• unemployment compensation
• foreign earned income & housing expenses for Americans living abroad (calculated on IRS Form 2555)
• ordinary dividends
• alimony received
• rental real estate, royalties, partnerships, S corporations, trusts, etc.
• taxable refunds, credits, or offsets of state and local income taxes, and
• other income such as prizes, awards, and gambling winnings.

Does Casino Winnings Qualify For Child Tax Credit Phase Out

You need not include: Supplemental Security Income, child support, food stamps, Temporary Assistance for Needy Families (TANF), gifts, workers compensation, Veteran’s disability payments, cash withdrawals from savings, qualified withdrawals from Roth IRAs or proceeds from loans (like student loans, home equity loans, or bank loans).

What You Subtract

To determine your final MAGI amount, subtract the following from your above total:

Does Casino Winnings Qualify For Child Tax Credit 2019

• certain self-employed expenses (deductible part of self-employment taxes; SEP, SIMPLE, and qualified plan contributions; self-employed health insurance deduction)
• student loan interest deduction
• educator expenses
• IRA deduction
• deductible moving expenses
• penalty on early withdrawal of savings
• health savings account deduction
• alimony paid
• domestic production activities deduction, and
• certain business expenses of reservists, performing artists, and fee-basis government officials.

Does Casino Winnings Qualify For Child Tax Credit 2018

When you file your tax return the following year, you have to reconcile the MAGI you actually earned with the amount of credits you received. If you earned more than you listed on your application, you may have to pay all or part of your credit payments back to the federal government. On the other hand, if you earned substantially less, you may be entitled to additional credits.