Lottery winnings tax in Arkansas
Arkansas taxes lottery winnings as ordinary income at graduated rates from 2% to 3.7%.
Updated · 2026 tax rules · How we calculate
You keep
$37,800
Cash at payout
$36,150
Total tax
$12,200
Over-withheld
$1,650
- Form W-2G
- Yes
- Federal withholding at payout
- $12,000
- Federal tax on the winnings
- $10,350
- State tax
- $1,850
- Arkansas withholding at payout
- $1,850
- Over-withheld
- $1,650
- You keep
- $37,800
$50,000 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.
Arkansas requires the payer to hold back 3.7% for state tax.
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.
$50,000 minus $12,200 in federal and state tax: an effective rate of 24.4%.
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 lottery winnings as ordinary income at graduated rates from 2% to 3.7%.[1]
- Federal tax form
- Lottery prizes of $2,000 or more that are at least 300 times the ticket price are reported on a W-2G. The threshold was $600 before 2026.[2]
- Federal withholding
- 24% is withheld from lottery prizes of more than $5,000 (minus the ticket price). No 300x test applies to lotteries.[4]
- Arkansas withholding
- Arkansas withholds 3.7% on lottery winnings over $5,000.[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 lottery winnings won there, so visitors may need to file a nonresident return.[7]
- Where to play
- Arkansas runs a state lottery.[8]
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 |
| $10,000 | Yes | $2,770 | $1,550 | $370 | $8,080 |
| $50,000 | Yes | $13,850 | $10,350 | $1,850 | $37,800 |
| $100,000 | Yes | $27,700 | $22,114 | $3,700 | $74,186 |
Assumes a $2 ticket price, so the 300x test is met at every amount shown.
Questions
- How much is Arkansas tax on lottery winnings?
- Arkansas taxes lottery winnings as ordinary income at graduated rates from 2% to 3.7%.[1]
- Does Arkansas withhold tax from lottery winnings?
- Arkansas withholds 3.7% on lottery winnings over $5,000.[5]
- Do visitors pay Arkansas tax on lottery winnings?
- Arkansas taxes nonresidents on lottery winnings won there, so visitors may need to file a nonresident return.[7]
More for Arkansas
All of Arkansas's gambling tax rules · Lottery 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
- [8] American Gaming Association, State of the States 2025 · checked September 22, 2026