The following types of earnings income (or losses) do not countas earnings from employment or self-employment under the earningstest:

Gambling Winnings Form

I have had a straight answer from the income tax people that any winnings from gambling are tax-exempt even if you could be considered a professional gambler. But no one seems to know for sure how gambling winnings affects benefits. It's been discussed here before but the responses were inconsistant and uninformed. Yes it must be reported, however, whether it will affect your benefits depends on whether you're on SSI or SSD. Supplemental Security Income (SSI) is a welfare type program with strict asset limits. SSD has no such limit. Answers to questions are for general purposes only and do not establish an attorney-client relationship. Will it affect my Missouri Food Stamp benefits Do I have to report it to the Missouri Food Stamp Office Lawyer: KLAW, Lawyer replied 3 years ago Payers of winnings from horse racing, dog racing, bingo games, and lotteries must report winnings of more than $600 to the Internal Revenue Service and the Iowa Department of Revenue by filing form W-2G.

Report Gambling Winnings

1. Any income from employment or self-employment earnedin or after the month the individual turns FRA;

2. Any income from self-employment received in a taxableyear after the year the individual becomes entitled to benefits.Such income must not be attributable to services performed afterthe first month of entitlement to benefits;

   Note: This income is excluded from grossincome only for purposes of the earnings test.

3. Damages, attorneys' fees, interest, or penalties paid under court judgment or by compromise settlement with the employerbased on a wage claim;

   Note: Any back pay recovered in a wageclaim does count for the earnings test.

4. Payments to secure release of an unexpired contractof employment;

5. Certain payments made under a plan or system established for making payments because of the employee's sickness or accident disability, medical or hospitalization expenses, or death (see §1311);

6. Payments from certain trust funds that are exemptfrom income tax (see §1314);

7. Payments from certain annuity plans that are exemptfrom income tax (see §1316);

8. Pensions and retirement pay;

9. Sick pay if paid more than six months after the monththe employee last worked;

10. Payments-in-kind for domestic service in the employer's private home for:

    1. Agricultural labor;

    2. Work not in the course of the employer's trade or business; or

    3. The value of meals and lodging furnished under certain conditions;

11. Rentals from real estate that cannot be counted in earnings from self-employment. For instance, the beneficiary didnot materially participate in production work on the farm, the beneficiarywas not a real estate dealer, etc.;

12. Interest and dividends from stocks and bonds (unlessthey are received by a dealer in securities in the course of business);

13. Gain or loss from the sale of capital assets, or sale, exchange, or conversion of other property that is not stock in tradenor considered inventory;

14. Net operating loss carry-over resulting from self-employmentactivities;

15. Loans received by employees unless the employees repaythe loans by their work;

16. Workers' compensation and unemployment compensation benefits and strike benefits;

17. Veterans' training pay or allowance;

18. Pay for jury duty;

19. Payments for achievement awards, length of serviceawards, hobbies or prize winnings from contests, unless the personenters contests as a trade or business;

20. Tips paid to an employee that are less than $20 amonth or are not paid in cash (see §1329);

21. Payments by an employer that are reimbursement specificallyfor travel expenses of the employee and are so identified by theemployer at the time of payment;

22. Payments to an employee as reimbursement or allowancefor moving expenses, if they are not counted as wages for SocialSecurity purposes (see §1333);

23. Royalties received in or after the year a person turns FRA. The royalties must flow from property created by the person'sown personal efforts that he or she copyrighted or patented beforethe taxable year in which he or she turned FRA;

    Note: These royalties are excluded fromgross income from self-employment only for purposes of the earningstest.

24. Retirement payments received by a retired partnerfrom a partnership provided certain conditions are met (see §1203);

25. Certain payments or series of payments paid by anemployer to an employee or an employee's dependents on or after theemployment relationship has ended due to:

    1. Death;

    2. Retirement for disability; or

    3. Retirement for age.

    The payments are made under a plan established by the employer(see §1319); and

26. Payments from Individual Retirement Accounts (IRA's)and Keogh Plans (see §1338).

Last Revised: Aug. 27, 2009