Daily fantasy sports winnings tax in Kentucky
Kentucky taxes daily fantasy winnings as ordinary income at a flat 3.5%.
Updated · 2026 tax rules · How we calculate
You keep
$4,225
Cash at payout
$5,000
Total tax
$775
Due when you file
$775
- Form 1099-MISC
- Yes
- Federal withholding at payout
- $0
- Federal tax on the winnings
- $600
- State tax
- $175
- Still to pay when you file
- $775
- You keep
- $4,225
Daily fantasy sites report net winnings of $2,000 or more for the year on a 1099-MISC.
Daily fantasy sports 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.
Winnings are ordinary income stacked on your other $60,000. Your top dollar lands in the 12% bracket.
Kentucky taxes gambling winnings as ordinary income.
Tax owed ($775) minus what was withheld ($0). Set this aside. A large balance can also mean an underpayment penalty unless you make an estimated payment.
$5,000 minus $775 in federal and state tax: an effective rate of 15.5%.
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.
The rules
- Kentucky tax
- Kentucky taxes daily fantasy winnings as ordinary income at a flat 3.5%.[1]
- Federal tax form
- Daily fantasy sites generally report net winnings of $2,000 or more for the year on Form 1099-MISC, not a W-2G. The 1099-MISC threshold was $600 before 2026.[2]Unverified
- Federal withholding
- Fantasy sites don't withhold federal tax from winnings in practice.[2]Unverified
- Kentucky withholding
- No Kentucky withholding requirement for daily fantasy winnings. Tax is due when you file.[3]Unverified
- Gambling losses
- If you itemize, you can deduct wagering losses allowed under federal law, including the 90% limit, even though Kentucky disallows most other itemized deductions.[4]
- Visitors
- Kentucky taxes nonresidents on daily fantasy winnings won there, so visitors may need to file a nonresident return.[5]Unverified
What you keep at different amounts
For a single filer with $60,000 of other income and no gambling losses, living and winning in Kentucky.
| Won | 1099-MISC | Withheld | Federal tax | State tax | You keep |
|---|---|---|---|---|---|
| $1,500 | No | $0 | $180 | $53 | $1,268 |
| $2,000 | Yes | $0 | $240 | $70 | $1,690 |
| $5,000 | Yes | $0 | $600 | $175 | $4,225 |
| $10,000 | Yes | $0 | $1,550 | $350 | $8,100 |
| $100,000 | Yes | $0 | $22,114 | $3,500 | $74,386 |
Questions
- How much is Kentucky tax on daily fantasy winnings?
- Kentucky taxes daily fantasy winnings as ordinary income at a flat 3.5%.[1]
- Does Kentucky withhold tax from daily fantasy winnings?
- Kentucky has no withholding requirement for daily fantasy winnings. Tax is due when you file.[3]Unverified
- Do visitors pay Kentucky tax on daily fantasy winnings?
- Kentucky taxes nonresidents on daily fantasy winnings won there, so visitors may need to file a nonresident return.[5]Unverified
More for Kentucky
All of Kentucky's gambling tax rules · Daily fantasy sports in every state
Sources
- [1] Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 · checked September 22, 2026
- [2] IRS, Instructions for Forms 1099-MISC and 1099-NEC (2026) · checked September 22, 2026
- [3] KRS 154A.110 Prizes taxable -- Withholdings from prize · checked September 22, 2026
- [4] KRS 141.019 Calculation of adjusted gross income and net income (effective July 15, 2026) · checked September 22, 2026
- [5] KRS 141.020 Levy of income tax on individuals · checked September 22, 2026