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Question: Help with reporting Lottery Winning. I included the amount won and Federal tax withheld but IRS rejects.?

I am electronically filing the tax and after filing a W2G form with all the information provided by the NY State statement, IRS rejects with the message listed below. The amount won is included on line 21 of form 1040 (Other Income) and the amount withheld is included on line 64 as part of the Federal amount withheld. No errors are detected but IRS rejects the tax with the following error: (Does any one know what I should do?)

Form W-2G – If Withholding is greater than zero, then Gross Winnings must be greater than Withholding and Gross Winnings must be reported as Gross Receipts/Sales of Schedule C/C-EZ or and Other Income When Gross Winnings is reported as Other Income Amount of Form 1040, then Type of Other Income must equal GAMBLING WINNINGS.

Answer: What did you enter for the description of the "other income" on the W2G? Lottery winning? Change it to "gambling winnings" and see if that works.

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