House Bill 1489 would enable an instant background check on anyone winning $2,500 or more on any of the Pennsylvania Lottery's games, including the multi-state games Powerball and Mega Millions. If the check revealed the winners owed any back taxes the full amount owing would be immediately deducted from their winnings.
At the moment Pennsylvania Lottery winners are only taxed on their winnings. The winner, the lottery, and the retailer who sold the winning ticket add their details to a standard claim form and the lottery shares the details with the IRS. Any winnings over $2,500 in a fiscal year are taxable. When the winnings exceed $5,000 the Pennsylvania Department of Revenue deducts the relevant amount of federal income tax, but there is no initial assessment of past tax issues.
If introduced, the new bill would also permit the Department of Public Welfare to check if winners are receiving any form of public assistance and make a quick decision on whether their new circumstances make them ineligible for further help.
Under present law the Public Welfare and Revenue departments are only permitted to check if lottery winners owe any child support, but if it is successfully implemented the new bill will grant them additional powers, allowing them to deduct any money owed (before back taxes).
Bill 1489 was passed by the House last week and will now be placed before the state senate