Charitable Raffles in Florida: 4 Quick Answers

December 21, 2013
Charitable Raffles in Florida: 4 Quick Answers

Even small charities must comply with IRS rules and state laws when it comes to conducting raffles and other chance drawings. Here are four quick answers to the questions of charities want to sponsor raffles in Florida.

1. Does it matter if we call it a raffle, a sweepstakes, a chance drawing, or something else?

No. The IRS and the State of Florida treats them all the same.

2. What information has to be included on our website promoting the raffle and individual tickets?

 Both your tickets and website must include the following information:

* The rules governing the conduct and operation of the drawing.

* The full name of the organization and its principal place of business.

* The source of the funds used to award cash prizes or to purchase prizes.

* The date, hour, and place where the winner will be chosen and the prizes will be awarded, unless the brochures, advertisements, notices, tickets, or entry blanks are not offered to the public more than 3 days prior to the drawing.

* That no purchase or contribution is necessary.

3. When do we have to report raffle winnings to the IRS?

You are required to file IRS From W-2G for anyone who wins a prize valued at over $600. For this purpose, each winner should give you IRS Form 5754, including his or her Social Security Number.

4. Are we required to withhold taxes on prizes?

In most cases, you are required to withhold 25% for income taxes only on prizes valued over $5,000. For non-cash prizes, you must collect the 25% withholding from the winner prior to delivering the prize. But if a winner refuses to give you an accurate Social Security Number, you also must withhold 28% for income taxes on prizes valued from $600 to $5,000 and at least 300 times the winner’s contribution.

Look here for great resources on Florida’s raffle laws and the IRS’s rules on charitable gaming.