Lottery players in cities all over the U.S. are pooling their resources for an increased chance at lottery riches. Dozens of Michigan-based lottery clubs have collected top Lottery prizes, and players throughout the state are finding out that clubs are a fun way to try their luck at Lottery. So how are they doing it? By forming lottery clubs, and you can, too!
What's it like to win the largest Big Game jackpot in Michigan Lottery history? The members of the "Friends Forever" lottery club know! This 17-member club from Jackson won a $45.6 million prize in the Jan. 24, 1997 drawing, and they've been all smiles ever since!
What is a lottery club?
Put simply, a lottery club is a group of at least two individuals who purchase wagers in a lottery game together and if a prize is won, it's divided among the lottery club members. It is up to the lottery club to determine its rules of operation, including distribution of prize monies to members. Before a prize can be claimed in the name of a club, an Employer Identification Number (EIN) must be obtained.
So how do you start a lottery club?
It's really quite easy. Simply obtain an SS-4 form (Application for Employer Identification Number) from a U.S. Treasury or Internal Revenue Service (IRS) office. You can download the SS-4 Application for Employer Identification Number form from the IRS Forms and Publications page . Other useful forms are also available at this site.
You may also call the IRS forms number toll-free at 1-800-829-3676 to order the SS-4 form. Once your form is completed, return it to the IRS, not to the Lottery.
How will the IRS know what portion of a prize a lottery club member received?
The club is required to fill out a Substitute 5754 form prior to prize payment. On this form (which will be signed by all club members), each member's name, address, date of birth, phone numbers and Social Security number will be listed, as well as their portion of winnings before taxes. This information will be used by the Lottery to issue payments and the IRS during tax time.
At time of payment, the club members will each receive a W-2G Form, showing their portion of the prize and income tax withholding, if any. Each member then uses the W2-G Form to complete his or her yearly tax return for the year in which the prize was paid by the Lottery.
For specific Lottery questions, please call the Public Relations office at (517) 335-5640.
For more information about federal income taxation and club reporting responsibilities, contact the IRS at (800) 829-1040.
For state tax information, contact the Michigan Department of Treasury at (517) 636-4486.