Horse racing winnings tax in Indiana
Indiana taxes horse racing winnings as ordinary income at a flat 2.95%.
Updated · 2026 tax rules · How we calculate
You keep
$6,654
Cash at payout
$5,844
Total tax
$1,346
Over-withheld
$810
- Form W-2G
- Yes
- Federal withholding at payout
- $1,920
- Federal tax on the winnings
- $1,110
- State tax
- $236
- Indiana withholding at payout
- $236
- Over-withheld
- $810
- You keep
- $6,654
$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.
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.
$8,000 minus $1,346 in federal and state tax: an effective rate of 16.8%.
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
- Indiana tax
- Indiana taxes horse racing winnings as ordinary income at a flat 2.95%.[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]
- Indiana withholding
- Indiana withholds 2.95% whenever federal tax is withheld.[5]Unverified
- Gambling losses
- Indiana has no deduction for gambling losses, even if you claim them on your federal return.[6]
- Visitors
- Indiana 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 Indiana.
| Won | W-2G | Withheld | Federal tax | State tax | You keep |
|---|---|---|---|---|---|
| $1,500 | No | $0 | $180 | $44 | $1,276 |
| $2,000 | Yes | $0 | $240 | $59 | $1,701 |
| $8,000 | Yes | $2,156 | $1,110 | $236 | $6,654 |
| $10,000 | Yes | $2,695 | $1,550 | $295 | $8,155 |
| $100,000 | Yes | $26,950 | $22,114 | $2,950 | $74,936 |
Assumes a $2 bet amount, so the 300x test is met at every amount shown.
Questions
- How much is Indiana tax on horse racing winnings?
- Indiana taxes horse racing winnings as ordinary income at a flat 2.95%.[1]
- Does Indiana withhold tax from horse racing winnings?
- Indiana withholds 2.95% whenever federal tax is withheld.[5]Unverified
- Do visitors pay Indiana tax on horse racing winnings?
- Indiana taxes nonresidents on horse racing winnings won there, so visitors may need to file a nonresident return.[7]
More for Indiana
All of Indiana's gambling tax rules · Horse racing in every state
Sources
- [1] Indiana DOR Departmental Notice #1 (2026) · 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] Indiana DOR Departmental Notice #16 (March 2026): Withholding on winnings from riverboat gaming · checked September 22, 2026
- [6] Indiana DOR Individual Income Tax FAQs · checked September 22, 2026
- [7] Indiana IT-40PNR Booklet 2025 · checked September 22, 2026