In New York, winnings from sweepstakes casinos are considered taxable income. Whether the winnings are cash or prizes, you must report them on your federal and state tax returns. The Internal Revenue Service (IRS) requires all gambling winnings to be declared as income, but each state may have additional tax rules. In New York, you would typically report these earnings using the IRS Form W-2G, which is used for gambling winnings. It’s important to keep detailed records of your winnings and losses, as losses can be used to offset winnings, potentially reducing your taxable income. Consulting with a tax professional is advisable for accurate filing.