Horse racing winnings tax in Massachusetts
Massachusetts taxes horse racing winnings as ordinary income at graduated rates from 5% to 9%.
Updated · 2026 tax rules · How we calculate
You keep
$6,490
Cash at payout
$5,680
Total tax
$1,510
Over-withheld
$810
- Form W-2G
- Yes
- Federal withholding at payout
- $1,920
- Federal tax on the winnings
- $1,110
- State tax
- $400
- Massachusetts withholding at payout
- $400
- Over-withheld
- $810
- You keep
- $6,490
$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.
Massachusetts taxes gambling winnings as ordinary income.
Massachusetts requires the payer to hold back 5% 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 $1,510 in federal and state tax: an effective rate of 18.9%.
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
- Massachusetts tax
- Massachusetts taxes horse racing winnings as ordinary income at graduated rates from 5% to 9%.[1]Unverified
- 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]
- Massachusetts withholding
- Massachusetts withholds 5% whenever federal tax is withheld.[5]
- Gambling losses
- Massachusetts doesn't follow the federal rule. You can deduct losses at Massachusetts-licensed casinos, sportsbooks and racetracks, up to your winnings from those same sources, without itemizing. Lottery and out-of-state losses don't count.[6]
- Visitors
- Massachusetts 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 Massachusetts.
| Won | W-2G | Withheld | Federal tax | State tax | You keep |
|---|---|---|---|---|---|
| $1,500 | No | $0 | $180 | $75 | $1,245 |
| $2,000 | Yes | $0 | $240 | $100 | $1,660 |
| $8,000 | Yes | $2,320 | $1,110 | $400 | $6,490 |
| $10,000 | Yes | $2,900 | $1,550 | $500 | $7,950 |
| $100,000 | Yes | $29,000 | $22,114 | $5,000 | $72,886 |
Assumes a $2 bet amount, so the 300x test is met at every amount shown.
Questions
- How much is Massachusetts tax on horse racing winnings?
- Massachusetts taxes horse racing winnings as ordinary income at graduated rates from 5% to 9%.[1]Unverified
- Does Massachusetts withhold tax from horse racing winnings?
- Massachusetts withholds 5% whenever federal tax is withheld.[5]
- Do visitors pay Massachusetts tax on horse racing winnings?
- Massachusetts taxes nonresidents on horse racing winnings won there, so visitors may need to file a nonresident return.[7]
More for Massachusetts
All of Massachusetts's gambling tax rules · Horse racing in every state
Sources
- [1] Sage Knowledgebase, Massachusetts 2026 withholding (relaying DOR Circular M) · 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] M.G.L. c. 62B, s. 2 · checked September 22, 2026
- [6] M.G.L. c. 62, s. 3.B(a)(18) · checked September 22, 2026
- [7] M.G.L. c. 62, s. 5A · checked September 22, 2026