Line 18: Other Income

Line 18 is where everything that doesn’t fit somewhere else ends up. Gambling winnings, jury duty pay, cancelled debt, prizes, hobby income, crypto mining proceeds — if the IRS taxed it on your federal return and there’s no dedicated line for it on the IT-201, it lands here. New York taxes all of it at ordinary income rates, which top out at 10.9% (NY rate schedules). No special treatment, no reduced rates. Just straight income.

What Counts as “Other Income”

The IRS definition controls (Schedule 1, Form 1040). Whatever you reported on Schedule 1, Line 8 of your federal 1040 flows directly to IT-201 Line 18. That includes:

Gambling winnings — W-2G amounts from casinos, racetracks, lottery, and sports betting apps. New York’s mobile sports betting market generated over $2 billion in operator revenue in 2023 alone, so the Tax Department is watching.
Jury duty pay — Typically $40/day in NY state courts (federal courts pay $50). Small amounts, but still taxable.
Cancellation of debt — If a lender forgave $600+ of debt, you got a 1099-C. That forgiven amount is income unless you qualify for an exclusion (insolvency, bankruptcy, or qualified principal residence debt under IRC § 108).
Prizes and awards — Won a car on a game show? That’s income at fair market value. Won a $50 gift card at your company raffle? Still income, technically.
Hobby income — Money from activities the IRS considers hobbies rather than businesses. Since the Tax Cuts and Jobs Act killed the hobby expense deduction federally, you’re taxed on gross hobby receipts with no offsetting deductions.
Cryptocurrency mining income — Coins you mined are taxable at fair market value on the date received (IRS Virtual Currency FAQ). This isn’t the same as selling crypto (that’s a capital gain on Line 13). Mining income shows up on Schedule 1 and flows here.
Form 1099-MISC Box 3 — Other income that doesn’t fit into rent, royalties, or nonemployee compensation. Sweepstakes winnings, incentive payments, and certain legal settlements land here.

Gambling: The Offset Rule

You can deduct gambling losses against gambling winnings — but only up to the amount you won (IRC § 165(d)). Won $8,000 at the Bellagio and lost $12,000 over the course of the year? You can offset the $8,000 in winnings with $8,000 of losses, bringing your taxable gambling income to zero. The other $4,000 in losses? Gone. You can’t carry it forward, you can’t apply it against other income, and you can’t pretend it didn’t happen.

New York follows the same federal rule here (IT-201 Instructions). Keep records — casino statements, betting app transaction histories, even handwritten logs if you’re old school. The Tax Department won’t just take your word for it during an audit.

Sports Betting Apps

DraftKings, FanDuel, BetMGM, and the rest all issue 1099s and W-2Gs when thresholds are met. But here’s what catches people: the apps report gross winnings per session, not your net result across all sessions. You might be down $3,000 for the year and still receive a W-2G showing $5,000 in winnings from one lucky Sunday. You’ll need to claim the $5,000 as income on Line 18 and separately itemize the losses.

Cancelled Debt and the Insolvency Exclusion

Getting a 1099-C doesn’t always mean you owe tax. If your total liabilities exceeded your total assets immediately before the cancellation, you were insolvent — and you can exclude some or all of the cancelled debt from income (IRS Form 982). You’ll file Form 982 with the IRS. New York generally follows this exclusion, so what you exclude federally stays excluded on Line 18.

Credit card settlements are the most common source. A bank agrees to accept $6,000 on a $10,000 balance, and you get a 1099-C for the $4,000 difference. If you were insolvent by at least $4,000 at that moment, no tax hit. If you were insolvent by only $2,000, you exclude $2,000 and report the remaining $2,000 as other income.

Common Mistakes on Line 18

Forgetting about the 1099-C entirely. Banks file them. The IRS matches them. New York matches them too, through information-sharing agreements. Ignoring a 1099-C is one of the fastest ways to trigger a notice.

Reporting crypto sales here instead of on Line 13. Selling Bitcoin you bought is a capital transaction. Mining new coins is ordinary income. Staking rewards? The IRS treats those as income when received (Rev. Rul. 2023-14) — so they go here on Line 18, not on the capital gains line.

Surprisingly, the state with the harshest gambling tax treatment isn’t New York — it’s Connecticut, which taxes gambling winnings at 6.99% with no deduction for losses if you’re below certain thresholds. New York at least lets you net losses against winnings dollar-for-dollar.

Sources & References

Common Questions

Do I have to report gambling winnings if I lost more than I won?

Yes. Gambling winnings go on Line 18 as gross income. Losses are claimed separately as an itemized deduction (Schedule A federally, and on your NY return). You can only deduct losses up to the amount of winnings — the net result on your return might be zero, but you still have to report both sides.

Is cryptocurrency mining income taxed differently than selling crypto?

Completely different. Mining income is ordinary income taxed at your regular NY rate (up to 10.9%) and reported on Line 18. Selling crypto you previously bought or mined is a capital gain or loss, reported on Line 13. The distinction matters because capital gains can qualify for lower federal rates, though NY taxes everything at ordinary rates anyway.

My credit card company sent me a 1099-C. Can I exclude it?

Possibly. If you were insolvent (total debts exceeded total assets) immediately before the cancellation, you can exclude some or all of it using Form 982. The exclusion amount is limited to how insolvent you were. New York follows the federal treatment here, so whatever you exclude on your 1040 stays excluded on the IT-201.

Where does hobby income go if I can’t deduct hobby expenses?

Hobby income goes on Line 18 through Schedule 1. Since the Tax Cuts and Jobs Act (2018-2025), hobby expenses aren’t deductible at all — not federally and not on the NY return. If you’re consistently making money from an activity, consider whether it qualifies as a business instead. The IRS applies a nine-factor test to make that determination.

Do I report lawsuit settlements on Line 18?

It depends on what the lawsuit was about. Settlements for physical injury or sickness are generally tax-free (IRC § 104(a)(2)). Settlements for emotional distress (without physical injury), lost wages, punitive damages, or breach of contract are taxable and typically show up on Line 18. The 1099-MISC or 1099-NEC you receive should clarify the classification.

Need Help With Your IT-201?

Other income can be tricky — especially crypto, cancelled debt, and gambling offsets. We’ll make sure Line 18 is right.

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