Raffles are popular fundraisers for not-for-profits. But they’re subject to strict tax rules. State laws on nonprofit-sponsored raffles vary, but you must comply with federal income tax requirements. First, you may owe unrelated business income tax unless your fundraiser is “substantially” staffed by volunteers. Second, raffle winnings must be reported to the IRS when the amount is $600 or more an d at least 300 times the raffle ticket price. Third, you need to withhold income tax from the winnings if the proceeds are more than $5,000. Contact us for details.