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WinningsTax

Horse racing winnings tax in Maryland

Maryland taxes horse racing winnings as ordinary income at graduated rates from 2% to 6.5%.

Updated · 2026 tax rules · How we calculate

$
$
$
$
More options
$

You keep

$6,510

Cash at payout

$5,320

Total tax

$1,490

Over-withheld

$1,190

Form W-2G
Yes

$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.

Federal withholding at payout
$1,920

The payer holds back 24% of winnings over $5,000 and sends it to the IRS. It's a prepayment, not the final tax.

Federal tax on the winnings
$1,110

Winnings are ordinary income stacked on your other $60,000. Your top dollar lands in the 22% bracket.

State tax
$380

Maryland taxes gambling winnings as ordinary income.

Maryland withholding at payout
$760

Maryland requires the payer to hold back 9.5% for state tax.

Over-withheld
$1,190

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.

You keep
$6,510

$8,000 minus $1,490 in federal and state tax: an effective rate of 18.6%.

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

Maryland tax
Maryland taxes horse racing winnings as ordinary income at graduated rates from 2% to 6.5%.[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]
Maryland withholding
Maryland withholds 8.75% for nonresidents on horse racing winnings over $5,000. Maryland withholds 9.5% on horse racing winnings over $5,000.[5]
Gambling losses
You can deduct gambling losses only if you itemize; Maryland itemized deductions generally follow your federal ones. From 2025, itemizers with federal AGI over $200,000 lose 7.5% of the excess from their deductions.[6]Unverified
Visitors
Maryland 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 Maryland.

WonW-2GWithheldFederal taxState taxYou keep
$1,500No$0$180$71$1,249
$2,000Yes$0$240$95$1,665
$8,000Yes$2,680$1,110$380$6,510
$10,000Yes$3,350$1,550$475$7,975
$100,000Yes$33,500$22,114$4,963$72,923

Assumes a $2 bet amount, so the 300x test is met at every amount shown.

Questions

How much is Maryland tax on horse racing winnings?
Maryland taxes horse racing winnings as ordinary income at graduated rates from 2% to 6.5%.[1]
Does Maryland withhold tax from horse racing winnings?
Maryland withholds 8.75% for nonresidents on horse racing winnings over $5,000. Maryland withholds 9.5% on horse racing winnings over $5,000.[5]
Do visitors pay Maryland tax on horse racing winnings?
Maryland taxes nonresidents on horse racing winnings won there, so visitors may need to file a nonresident return.[7]

More for Maryland

All of Maryland's gambling tax rules · Horse racing 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] Maryland Tax Alert: Gambling Winnings and Your Maryland Tax Obligations (effective July 1, 2025) · checked September 22, 2026
  6. [6] DLS Fiscal and Policy Note, HB 926 (2026 Session) · checked September 22, 2026
  7. [7] Maryland Withholding Tax Facts, January 2026 · checked September 22, 2026