Iowa gambling winnings tax calculator
Iowa taxes gambling winnings as ordinary income at a flat 3.8%.
Updated · 2026 tax rules · How we calculate
You keep
$8,070
Cash at payout
$7,220
Total tax
$1,930
Over-withheld
$850
- Form W-2G
- Yes
- Federal withholding at payout
- $2,400
- Federal tax on the winnings
- $1,550
- State tax
- $380
- Iowa withholding at payout
- $380
- Over-withheld
- $850
- You keep
- $8,070
$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.
Iowa taxes gambling winnings as ordinary income.
Iowa requires the payer to hold back 3.8% 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 $1,930 in federal and state tax: an effective rate of 19.3%.
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 Iowa taxes gambling winnings
- State income tax
- Iowa taxes gambling winnings as ordinary income at a flat 3.8%.[1]
- Gambling losses
- Iowa starts from federal taxable income, so gambling losses lower your Iowa tax only if you itemize them federally, with the federal 90% limit.[2]
- Withholding
- Iowa withholds 3.8% from lottery prizes over $600, pari-mutuel winnings over $1,000, slot wins over $1,200 and, from 2026, sports-betting wins when federal withholding applies. Tribal casinos don't withhold.[3]
- Nonresidents
- Nonresidents owe Iowa tax on Iowa winnings and usually won't get all the Iowa withholding back. The Iowa-Illinois reciprocal agreement doesn't cover gambling winnings.[4]
- Tax paid to other states
- Residents can claim the out-of-state tax credit (IA 130) for income another state taxed, limited to the Iowa tax on that income.[5]
- Local tax
- Residents pay a school district surtax figured as a percentage of their Iowa tax, so it reaches gambling winnings indirectly. A few counties add an EMS surtax.[6]
- Legal gambling
- Sports betting: legal online and in person. State lottery: yes. Casinos: yes. Online casino: not legal.[7]
Also worth knowing
Examples by game
For a single filer with $60,000 of other income and no gambling losses, living and winning in Iowa.
| Game | Won | Withheld | Federal tax | State tax | You keep |
|---|---|---|---|---|---|
| Sports betting | $10,000 | $2,780 | $1,550 | $380 | $8,070 |
| Casino and slots | $5,000 | $190 | $600 | $190 | $4,210 |
| Table games | $5,000 | $0 | $600 | $190 | $4,210 |
| Poker tournaments | $20,000 | $0 | $3,750 | $760 | $15,490 |
| Lottery | $50,000 | $13,900 | $10,350 | $1,900 | $37,750 |
| Daily fantasy sports | $5,000 | $0 | $600 | $190 | $4,210 |
| Horse racing | $8,000 | $2,224 | $1,110 | $304 | $6,586 |
Questions
- Does Iowa tax gambling winnings?
- Yes, at a flat 3.8%.[1]
- Can you deduct gambling losses in Iowa?
- Iowa starts from federal taxable income, so gambling losses lower your Iowa tax only if you itemize them federally, with the federal 90% limit.[2]
- Does Iowa withhold tax from gambling winnings?
- Iowa withholds 3.8% from lottery prizes over $600, pari-mutuel winnings over $1,000, slot wins over $1,200 and, from 2026, sports-betting wins when federal withholding applies. Tribal casinos don't withhold.[3]
- Do nonresidents pay Iowa tax on gambling winnings?
- Nonresidents owe Iowa tax on Iowa winnings and usually won't get all the Iowa withholding back. The Iowa-Illinois reciprocal agreement doesn't cover gambling winnings.[4]
Iowa by game
Sources
- [1] Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 · checked September 22, 2026
- [2] Iowa DOR IA 1040 Expanded Instructions, Intro 4: Conformity with the Internal Revenue Code · checked September 22, 2026
- [3] Iowa DOR: Iowa Withholding Tax Information · checked September 22, 2026
- [4] Iowa DOR: Iowa Tax On Gambling · checked September 22, 2026
- [5] Iowa DOR IA 1040 Expanded Instructions, Line 15: Out-of-State Tax Credit · checked September 22, 2026
- [6] Iowa DOR IA 1040 Expanded Instructions: School District Surtax / Emergency Medical Services Surtax · checked September 22, 2026
- [7] Covers, Legal sports betting in the US · checked September 22, 2026