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WinningsTax

Casino and slots winnings tax in Iowa

Iowa taxes slot machine winnings as ordinary income at a flat 3.8%.

Updated · 2026 tax rules · How we calculate

$
$
$
More options
$

You keep

$4,210

Cash at payout

$4,810

Total tax

$790

Due when you file

$600

Form W-2G
Yes

$5,000 is at or above the $2,000 reporting threshold, so the payer files a W-2G with the IRS and gives you a copy.

Federal withholding at payout
$0

Casino and slots winnings aren't subject to regular federal withholding, whatever the amount. Tax is still owed when you file. If you don't give the payer your Social Security number, 24% backup withholding applies.

Federal tax on the winnings
$600

Winnings are ordinary income stacked on your other $60,000. Your top dollar lands in the 12% bracket.

State tax
$190

Iowa taxes gambling winnings as ordinary income.

Iowa withholding at payout
$190

Iowa requires the payer to hold back 3.8% for state tax.

Still to pay when you file
$600

Tax owed ($790) minus what was withheld ($190). Set this aside. A large balance can also mean an underpayment penalty unless you make an estimated payment.

You keep
$4,210

$5,000 minus $790 in federal and state tax: an effective rate of 15.8%.

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

Iowa tax
Iowa taxes slot machine winnings as ordinary income at a flat 3.8%.[1]
Federal tax form
Slot machine and bingo winnings of $2,000 or more are reported on a W-2G, without subtracting the wager. The threshold was $1,200 before 2026. Keno is also $2,000, after subtracting the wager on the winning game.[2]
Federal withholding
Slot machine, keno and bingo winnings are exempt from regular gambling withholding by statute, whatever the amount.[4]
Iowa withholding
Iowa withholds 3.8% on slot machine winnings over $1,200.[5]
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.[6]
Visitors
Iowa taxes nonresidents on slot machine winnings won there, so visitors may need to file a nonresident return.[7]
Where to play
Iowa has casinos.[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 Iowa.

WonW-2GWithheldFederal taxState taxYou keep
$1,500No$57$180$57$1,263
$2,000Yes$76$240$76$1,684
$5,000Yes$190$600$190$4,210
$10,000Yes$380$1,550$380$8,070
$100,000Yes$3,800$22,114$3,800$74,086

Questions

How much is Iowa tax on slot machine winnings?
Iowa taxes slot machine winnings as ordinary income at a flat 3.8%.[1]
Does Iowa withhold tax from slot machine winnings?
Iowa withholds 3.8% on slot machine winnings over $1,200.[5]
Do visitors pay Iowa tax on slot machine winnings?
Iowa taxes nonresidents on slot machine winnings won there, so visitors may need to file a nonresident return.[7]

More for Iowa

All of Iowa's gambling tax rules · Casino and slots in every state

Sources

  1. [1] Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 · checked September 22, 2026
  2. [2] IRS, Instructions for Forms W-2G and 5754 (01/2026) · checked September 22, 2026
  3. [3] Federal Register, REG-113229-25 proposed rule (Apr. 17, 2026) · checked September 22, 2026
  4. [4] 26 U.S. Code § 3402 (withholding) · checked September 22, 2026
  5. [5] Iowa DOR: Iowa Withholding Tax Information · checked September 22, 2026
  6. [6] Iowa DOR IA 1040 Expanded Instructions, Intro 4: Conformity with the Internal Revenue Code · checked September 22, 2026
  7. [7] Iowa DOR: Iowa Tax On Gambling · checked September 22, 2026
  8. [8] Covers, Legal sports betting in the US · checked September 22, 2026