Do You Have to Pay Taxes on Chumba Casino?
Most gamers understand how different social casinos are from the regular ones in terms of wagering. But is that all there is? Do social platforms like Chumba casino offer any uniqueness about cash prize redemption or taxes?
We've brought all the answers to you in this review. We went deep into the rules and policies of this casino to find out their stance on Chumba taxes and other fees. You'll learn important information like how much of the prizes on Chumba Casino actually go to players.
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The legality of Chumba Casino
Chumba Casino is a fully regulated social casino licensed from the reputable Malta Gaming Authority. This gaming platform is owned by and falls under the full operation of VGW Malta, which also processes the payments. This company also reserves the right to appoint any Payment Administration Agent to take charge of the payments.
VGW Games has a license MGA/B2C/188/2010, with which it runs Promotional Play Games. Although the company is subject to Maltese law, it runs Chumba Casino in line with the financial regulations of accepted territories. And Chumba Casino taxes also fall under this purview.
Your Chumba Casino prizes and their financial implications
Chumba is a social casino platform and does not require purchase before playing. This is because the primary currency, Sweeps Coins, is given to players for free. For instance, with a
Chumba Casino promo code, you can claim the no purchase SC.
Despite the free play, prizes from games that use Sweeps Coins can be redeemed for either cash prizes or gift cards. You can check out our other
Chumba Casino review
for a better idea of how the sweepstakes model works.
Since Sweeps Coins possess monetary value by redemption, they are classified as casino prizes. Players must pay Chumba taxes on casino prizes like in every other US-based gambling outfit. The good news is that only significant prizes will be subject to taxation.
Do you pay taxes on Chumba Casino prizes?
Section 23, sub-section 4 of Chumba Casino's Terms of Use states that "You are solely responsible for any taxes, which apply to any Prizes that you collect from your Participation.”
This clause redirects the question of paying taxes to the country's tax regulation. As far as the US is concerned, casino prizes are subject to gambling taxes, and players have an obligation to self-report them. Also, players can be banned from casinos if they do not report their casino prizes or pay the required tax. This does not apply to bonus money obtained with
Chumba Casino slots cheat codes, since those cannot be redeemed.
The size of your sweepstakes prizes determines if the amount qualifies as Tax Withholding or should be declared by the player. If your prizes are tax worthy, the amount you’ll need to pay depends on the amount won, your location, and other factors established by the relevant authority where you reside.
Furthermore, the fact that users play games from their mobile phones does not nullify the Chumba Casino tax form. Online gamers are obliged to pay necessary taxes regardless of the platform they choose to play on. This rule applies whether you play on the
Chumba Casino casino app
or the online website.
Chumba Casino further dissolves itself from providing advice or information regarding tax in section 21, subsection 2 of its Terms of Use. "VGW Group does not provide advice regarding tax and/or legal matters. Players who wish to obtain advice regarding tax and legal matters are advised to contact appropriate advisors."
Tax amount on Chumba Casino prizes
In the US, casino prizes, including those from sweepstakes, are subject to federal gambling taxes at a flat rate of 24%. In addition, players might have to pay other fees. For instance, this casino reserves the right to charge fees for prize redemption.
Moreover, foreign exchange transactions might attract fees, charges, or other costs during the purchase of Gold Coins. It's necessary to note that while the casino doesn't involve itself in any potential taxes resulting from your prizes, it stipulates certain redemption limits. The operator limits prize redemption to a maximum of $10,000 daily. In New York and Florida, this threshold is brought down to $5,000.
How to report Chumba Casino online gambling taxes
There are two primary ways to report Chumba taxes. The first is allowing the casino to pay withholding taxes on your behalf. You'll then get a Chumba Casino tax form or Form W-2G, which you can submit alongside your income tax returns.
Secondly, players can file the taxes personally with the IRS at the stipulated rate. When you receive gift cards rather than cash prizes, you should report its fair market value as income. Gambling prizes should be recorded on your tax return as "other income."
Casino bonuses are not subject to taxation, so you can claim the full value of your
Chumba Casino slots sign up bonus.
Final points on Chumba Casino taxes
Paying taxes is one aspect of online casinos most gamers do not want to deal with. Although Chumba Casino is not considered a gambling platform due to its sweepstakes model, any converted prizes will still be subject to taxes. According to US law, the stipulated flat rates apply whether for real money bets or sweepstakes.
As far as Chumba Casino is concerned, tax requirements depend on a player's jurisdiction. Foreign exchange transactions and prize redemption might also attract fees or extra costs. Fortunately, you won't have to worry about taxes when you rake in small prizes, only with the really big ones.
$55 Stake Cash + 260K Gold Coins + 5% Rakeback
Chumba Casino taxes FAQ
⏳ Do you pay taxes on Chumba Casino prizes?
US law stipulates gambling taxes only for real money casino winnings. However, while Chumba Casino allows players to work their way around to redeem real money, the site identifies as a social casino. Our review discussed how Chumba Casino rewards are classified and their status with taxation laws.
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Who do I pay the Chumba Casino taxes to?
Like every other online casino in the US, there are rules governing gambling earnings. Taxation is often a necessary requirement, especially with big cash redemptions or huge jackpots. Everything about Chumba Casino rewards and taxes are available in our review.
💲 What is the flat rate on Chumba Casino taxes?
Online casinos are not exempted from paying taxes, especially in the US. Lawmakers stipulate a flat rate, so the amount you pay in taxes will depend on the amount won. There's more in our Chumba taxes review.
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