Horse racing winnings tax in Arkansas
Arkansas taxes horse racing winnings as ordinary income at graduated rates from 2% to 3.7%.
Updated · 2026 tax rules · How we calculate
You keep
$6,594
Cash at payout
$6,080
Total tax
$1,406
Over-withheld
$514
- Form W-2G
- Yes
- Federal withholding at payout
- $1,920
- Federal tax on the winnings
- $1,110
- State tax
- $296
- Over-withheld
- $514
- You keep
- $6,594
$8,000 is at or above the $2,000 reporting threshold, so the payer files a W-2G with the IRS and gives you a copy.
The payer holds back 24% of winnings over $5,000 and sends it to the IRS. It's a prepayment, not the final tax.
Winnings are ordinary income stacked on your other $60,000. Your top dollar lands in the 22% bracket.
Arkansas taxes gambling winnings as ordinary income.
More was withheld than these winnings add to your tax. The difference reduces what you owe on the rest of your return, or comes back as a refund.
$8,000 minus $1,406 in federal and state tax: an effective rate of 17.6%.
An estimate for 2026, not tax advice. It treats this win as your only gambling income for the year and leaves out local income taxes. Nothing you enter leaves your browser.
The rules
- Arkansas tax
- Arkansas taxes horse racing winnings as ordinary income at graduated rates from 2% to 3.7%.[1]
- Federal tax form
- Horse racing (pari-mutuel) winnings are reported on a W-2G when they are $2,000 or more (after subtracting the wager) and at least 300 times the wager. The threshold was $600 before 2026.[2]
- Federal withholding
- 24% is withheld from pari-mutuel winnings of more than $5,000, but only when the win is also at least 300 times the wager.[2]
- Arkansas withholding
- No Arkansas withholding requirement for horse racing winnings. Tax is due when you file.[5]
- Gambling losses
- You can deduct losses only when you itemize on Form AR3 (line 27), up to the gambling winnings you report.[7]Unverified
- Visitors
- Arkansas taxes nonresidents on horse racing winnings won there, so visitors may need to file a nonresident return.[7]
What you keep at different amounts
For a single filer with $60,000 of other income and no gambling losses, living and winning in Arkansas.
| Won | W-2G | Withheld | Federal tax | State tax | You keep |
|---|---|---|---|---|---|
| $1,500 | No | $0 | $180 | $56 | $1,265 |
| $2,000 | Yes | $0 | $240 | $74 | $1,686 |
| $8,000 | Yes | $1,920 | $1,110 | $296 | $6,594 |
| $10,000 | Yes | $2,400 | $1,550 | $370 | $8,080 |
| $100,000 | Yes | $24,000 | $22,114 | $3,700 | $74,186 |
Assumes a $2 bet amount, so the 300x test is met at every amount shown.
Questions
- How much is Arkansas tax on horse racing winnings?
- Arkansas taxes horse racing winnings as ordinary income at graduated rates from 2% to 3.7%.[1]
- Does Arkansas withhold tax from horse racing winnings?
- Arkansas has no withholding requirement for horse racing winnings. Tax is due when you file.[5]
- Do visitors pay Arkansas tax on horse racing winnings?
- Arkansas taxes nonresidents on horse racing winnings won there, so visitors may need to file a nonresident return.[7]
More for Arkansas
All of Arkansas's gambling tax rules · Horse racing in every state
Sources
- [1] Arkansas Bureau of Legislative Research, SB1 fiscal impact (2026 First Extraordinary Session) · checked September 22, 2026
- [2] IRS, Instructions for Forms W-2G and 5754 (01/2026) · checked September 22, 2026
- [3] Federal Register, REG-113229-25 proposed rule (Apr. 17, 2026) · checked September 22, 2026
- [4] 26 U.S. Code § 3402 (withholding) · checked September 22, 2026
- [5] A.C.A. 26-51-920 Casinos - Withholding and reporting · checked September 22, 2026
- [6] Arkansas Scholarship Lottery - Claim Your Prize · checked September 22, 2026
- [7] Arkansas 2025 AR1000F/AR1000NR Instructions (AR3 line 27) · checked September 22, 2026