State Law Collects Back Taxes On Lottery Winnings

Only a handful of people are lucky enough to win lottery drawings each year, some of which make millions of dollars in winnings. While many of these people may have struck it rich, a new law could stand in the way of some receiving their money.

Getting Their Fair Share

Legislation passed a new law in Connecticut that requires that lottery winners be checked for back taxes before any of their winnings can be paid out. As of New Years Day 2012, anyone who wins the lottery will have their personal information checked against a list of tax delinquent and back due penalties before any prizes can be distributed. Lottery winners will also be checked for back due child or domestic support payments prior to receiving any winnings. The law is applicable to any winnings of $5,000 or more acquired in the state of Connecticut.

The law came about as a measure to resolve the $400 million in state back taxes that are said to be currently delinquent.  The House Chair of the Judiciary Committee, Gerald Fox says,”  “If someone is lucky enough to win a lottery prize and they also owe back taxes it is reasonable to collect those taxes at that time. This is not just about revenue owed the state, but also about fairness and improving confidence in our tax system.”