Do Gambling Winnings Affect Social Security?

About one in five Americans, or around 65 million people, receive some form of Social Security benefits. With over 85% of American adults having gambled at least once in their lives, it’s safe to assume that millions of people are wondering, ”Do gambling winnings affect Social Security benefits?” 

The answer is not a straightforward ‘yes’ or ‘no’ because it depends on the benefits you receive. In short, Social Security Disability Insurance (SSDI) isn’t affected, but Supplemental Security Income (SSI) is. However, there are nuances to be discussed, so keep reading to find out.

What constitutes gambling winnings?

Before we explain how gambling winnings affect Social Security disability benefits, you need to understand how the tax system of the US views gambling winnings.

All earnings obtained through games of chance are considered taxable income in the eyes of the Internal Revenue Service (IRS), including:

• • Land-based and online casinos
• • Lotteries and raffles
• • Horse and dog races
• • Bingo and keno
• • Land-based and online sportsbooks
• • Sweepstakes
• • Poker tournaments
• • Non-cash prizes obtained via gambling

All these and any other winnings made through gambling are part of your gross income and are thus considered income, making them fully taxable. In other words, you must report them on your federal tax returns, meaning you must keep a record of all your gambling ventures. 

When reviewing W2-G instructions, keep in mind that all gambling winnings must be reported. This includes earnings from online or land-based casinos, sports betting, lotteries, bingo, and other gambling activities.

How does online gambling affect social security? 

Even though there’s talk about whether Social Security can be saved, you still need to learn how online gambling winnings affect it.

As explained above, online gambling winnings are considered taxable income by the IRS, and, as such, they must be reported on your tax returns. Consequently, they affect a part of your Social Security benefits.

Specifically, as they are considered unearned income, they affect SSI benefits but not SSDI ones. In the case of the former, they add towards countable income, which is then subtracted from the maximum SSI payment. In essence, the higher your income, the lower your benefits.

The maximum amount you can receive from an SSI payment is $967 per month (individual) or $1,450 per month (couple) in 2025. The number is adjusted every year, so remember to check back annually. Likewise, the actual amount you receive may change based on cost-of-living adjustments (COLA).

Now, even though most income is included in countable income that’s subtracted, there are two notable exclusions:

‣ The first $20 of any income in the month is not counted.

‣ Half of any earned income above $65 in the month is not counted.

Moreover, federal tax refunds, credits, and food and housing aid also don’t contribute. So, once all of this is taken into account, the SSA will determine your countable income and subtract it from the maximum amount you can receive as SSI benefits, resulting in your monthly SSI payment.

Social Security and gambling winnings — your responsibilities

You must report all your gambling winnings to the IRS. If you’re receiving SSI benefits, you also need to report your gambling earnings to the Social Security Administration (SSA). Bear in mind that you report the former annually as part of your tax returns, while the latter needs to be done as soon as possible.

In other words, it’s best to report your gambling winnings no later than 10 days after the end of the month in which you made them, either online or at a land-based establishment.

It’s thus crucial to keep detailed records of the money you make through games of chance, as this will make it much easier for you to report everything properly. You can always use tools like financial software or apps made for tracking gambling winnings to make this task simpler. Similarly, some online casinos provide a profit and loss tracker within your account section. 

If you’re ever in doubt, it’s best to consult a financial advisor or a tax professional. 

How do gambling winnings affect Social Security benefits?

SSDI and SSI provide vital support to millions of Americans with disabilities. While similar, their key differences mean gambling winnings impact each program differently. We’ll look at these next:

Supplemental Security Income (SSI)

Supplemental Security Income (SSI) is a monthly benefit program paid by the SSA to Americans with limited income who are 65 or older, blind, or have another qualifying disability.

Social Security, like the IRS, considers gambling winnings unearned income, subjecting it to the standard rules surrounding personal revenue. Thus, gambling winnings affect SSI. They can potentially reduce and even suspend your SSI benefits because the program has a total income limit. 

Consequently, you need to report your winnings to the SSA to keep receiving the benefits every month.

Social Security Disability Insurance (SSDI)

Social Security Disability Insurance (SSDI) is a monthly benefit paid to adults who cannot work because of an impairment or a major illness expected to last for more than a year. 

The benefits are based on past earnings and contributions to the Social Security system, but since the money you make while gambling is considered unearned income, it doesn’t affect your SSDI. In other words, there’s no correlation between gambling winnings and SSDI.

Conclusion

As you can see, gambling winnings are counted as legitimate income by the IRS and as unearned income by the SSA, so they always affect your SSI benefits (but not your SSDI benefits). So, in conclusion, the more you’ve earned through gambling, the more your SSI benefits are lowered.

It’s crucial to keep track of your winnings for accurate reporting. This also simplifies the process of filing your annual tax returns when the time comes. If you’re unsure about the legalities of Social Security and gambling income, seeking professional advice is recommended.

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