Indiana gambling winnings tax calculator
Indiana taxes gambling winnings as ordinary income at a flat 2.95%.
Updated · 2026 tax rules · How we calculate
You keep
$8,155
Cash at payout
$7,305
Total tax
$1,845
Over-withheld
$850
- Form W-2G
- Yes
- Federal withholding at payout
- $2,400
- Federal tax on the winnings
- $1,550
- State tax
- $295
- Indiana withholding at payout
- $295
- Over-withheld
- $850
- You keep
- $8,155
$10,000 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.
Indiana taxes gambling winnings as ordinary income.
Indiana requires the payer to hold back 2.95% 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.
$10,000 minus $1,845 in federal and state tax: an effective rate of 18.5%.
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.
How Indiana taxes gambling winnings
- State income tax
- Indiana taxes gambling winnings as ordinary income at a flat 2.95%.[1]
- Gambling losses
- Indiana has no deduction for gambling losses, even if you claim them on your federal return.[2] How the federal 90% loss rule works
- Withholding
- For 2026, Indiana casinos withhold 2.95% from slot and keno wins of $2,000 or more, even without federal withholding. Payers that withhold federal tax on other winnings also withhold 2.95%.[3]Unverified
- Nonresidents
- Nonresidents owe Indiana tax on winnings from Indiana casinos, pari-mutuel wagering and lotteries and file Form IT-40PNR. Reciprocity agreements don't cover these winnings.[4]
- Tax paid to other states
- Residents can claim a credit for tax paid to another state, limited to the least of that tax, 3% of the income, or the Indiana tax on it. If the other state required no return, you use the W-2G and its state withholding.[5]
- Local tax
- Residents pay county income tax, 0.5% to 3.0% for 2026, on all income including gambling winnings. Nonresidents' Indiana winnings aren't subject to county tax.[6]
- Legal gambling
- Sports betting: legal online and in person. State lottery: yes. Casinos: yes. Online casino: not legal.[7]
Also worth knowing
- Winnings from Indiana riverboats and lotteries aren't covered by Indiana's reciprocal agreements with Kentucky, Michigan, Ohio, Pennsylvania and Wisconsin, so residents of those states owe Indiana tax on them.[4]
- If another state didn't require a return for your gambling winnings, you claim Indiana's other-state credit by attaching the W-2G and using the state tax withheld (IT-40 "Exception 1").[5]
Examples by game
For a single filer with $60,000 of other income and no gambling losses, living and winning in Indiana. Indiana ranks 13th of 51 for what you keep from a $10,000 sports bet, and 14th of 51 for a $1 million lottery prize, counting state tax only (Indiana's local income taxes aren't included). See every state ranked.
| Game | Won | Withheld | Federal tax | State tax | You keep |
|---|---|---|---|---|---|
| Sports betting | $10,000 | $2,695 | $1,550 | $295 | $8,155 |
| Casino and slots | $5,000 | $148 | $600 | $148 | $4,253 |
| Table games | $5,000 | $0 | $600 | $148 | $4,253 |
| Poker tournaments | $20,000 | $0 | $3,750 | $590 | $15,660 |
| Lottery | $50,000 | $13,475 | $10,350 | $1,475 | $38,175 |
| Daily fantasy sports | $5,000 | $0 | $600 | $148 | $4,253 |
| Horse racing | $8,000 | $2,156 | $1,110 | $236 | $6,654 |
Questions
- Does Indiana tax gambling winnings?
- Yes, at a flat 2.95%.[1]
- Can you deduct gambling losses in Indiana?
- Indiana has no deduction for gambling losses, even if you claim them on your federal return.[2]
- Does Indiana withhold tax from gambling winnings?
- For 2026, Indiana casinos withhold 2.95% from slot and keno wins of $2,000 or more, even without federal withholding. Payers that withhold federal tax on other winnings also withhold 2.95%.[3]Unverified
- Do nonresidents pay Indiana tax on gambling winnings?
- Nonresidents owe Indiana tax on winnings from Indiana casinos, pari-mutuel wagering and lotteries and file Form IT-40PNR. Reciprocity agreements don't cover these winnings.[4]
Indiana by game
Gambling across the border from Indiana
Win in a neighboring state and both states can tax it: the state you won in as a visitor, and Indiana as your home state, usually with a credit for the tax you paid there.
Sources
- [1] Indiana DOR Departmental Notice #1 (2026) · checked September 22, 2026
- [2] Indiana DOR Individual Income Tax FAQs · checked September 22, 2026
- [3] Indiana DOR Departmental Notice #16 (March 2026): Withholding on winnings from riverboat gaming · checked September 22, 2026
- [4] Indiana IT-40PNR Booklet 2025 · checked September 22, 2026
- [5] Indiana IT-40 Booklet 2025 · checked September 22, 2026
- [6] Indiana DOR Departmental Notice #1: County income tax rates (2026) · checked September 22, 2026
- [7] Covers, Legal sports betting in the US · checked September 22, 2026
- [8] Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 · checked September 22, 2026
- [9] Illinois DOR Q&A: Do I have to pay income tax on gambling winnings if I already paid the tax in the state where I won? · checked September 22, 2026
- [10] KRS 141.020 Levy of income tax on individuals · checked September 22, 2026
- [11] MCL 206.110(2)(c)-(d) · checked September 22, 2026
- [12] 2025 Ohio IT 1040 Instructions / IT NRC Line 4 · checked September 22, 2026