Both the IRS and the state of Illinois consider gambling winnings to be income. You have to report it on your tax returns, and you have to pay taxes on it. Lottery winnings, slot machine jackpots and your take from hitting the trifecta -- it is all income. And because it is all income, it is also subject to garnishment for child support debt.
Gov. Pat Quinn signed a bill into law this week that authorizes casinos and race tracks to withhold up to 100 percent of winnings from individuals who are behind on their child support payments. The establishments will identify the parents who are in arrears from the State Case Registry and will direct the money instead to the Illinois Department of Healthcare and Family Services. The department is responsible for seeing that the money makes it to the custodial parent.
The law requires the establishments to put up notices to patrons regarding the law change. It also requires the establishments to withhold only the amount owed. For example, if a patron wins $100,000 but only owes $25,000 in back child support, the casino must remit the balance of $75,000 to the patron. Casinos and race tracks will receive an administrative fee, in part as an incentive to comply with the law.
The process differs in one important way from wage garnishment. With gambling winnings, no court order is necessary. When an employer garnishes a worker's wages, it is acting on a court order, the automatic income withholding order, that is usually included with the original child support order. Garnishment begins when a custodial parent forwards a copy of the order to the employer. In most cases, the money is sent directly to the custodial parent, not to the state.
Illinois takes enforcement of child support very seriously, as this new law indicates. If you are having trouble making or collecting regular child support payments, please contact an experienced family law attorney for guidance.
Source: NBC Chicago, "Quinn Signs Bill Targeting Child Support Deadbeats," Associated Press, Aug 13, 2013