Michigan gambling winnings tax calculator
Michigan taxes gambling winnings as ordinary income at a flat 4.25%.
Updated · 2026 tax rules · How we calculate
You keep
$8,025
Cash at payout
$7,600
Total tax
$1,975
Over-withheld
$425
- Form W-2G
- Yes
- Federal withholding at payout
- $2,400
- Federal tax on the winnings
- $1,550
- State tax
- $425
- Over-withheld
- $425
- You keep
- $8,025
$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.
Michigan taxes gambling winnings as ordinary income.
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 $1,975 in federal and state tax: an effective rate of 19.8%.
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.
How Michigan taxes gambling winnings
- State income tax
- Michigan taxes gambling winnings as ordinary income at a flat 4.25%.[1]
- Gambling losses
- If you itemize federally, you can deduct the gambling losses you claimed on your federal return, so the 90% limit carries over; losses can't take winnings below zero.[2]
- Withholding
- The Michigan Lottery withholds 4.25% from prizes over $5,000, whatever your residency. Casinos and racetracks withhold 4.25% only from nonresidents, on W-2G-reportable winnings; residents' winnings are reported, not withheld.[3]
- Nonresidents
- Nonresidents owe Michigan tax on Michigan Lottery prizes and on winnings paid by Michigan casinos (commercial or tribal) and racetracks. Reciprocity agreements don't cover gambling winnings.[4]
- Tax paid to other states
- Residents get a credit for income tax paid to another state or its cities on income Michigan also taxes, capped at the Michigan tax on it.[5]
- Local tax
- Residents of Michigan's income-tax cities, such as Detroit (2.4%), pay city tax on gambling winnings. Nonresidents don't owe city tax on winnings.[6]
- Legal gambling
- Sports betting: legal online and in person. State lottery: yes. Casinos: yes. Online casino: 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 Michigan.
| Game | Won | Withheld | Federal tax | State tax | You keep |
|---|---|---|---|---|---|
| Sports betting | $10,000 | $2,400 | $1,550 | $425 | $8,025 |
| Casino and slots | $5,000 | $0 | $600 | $213 | $4,188 |
| Table games | $5,000 | $0 | $600 | $213 | $4,188 |
| Poker tournaments | $20,000 | $0 | $3,750 | $850 | $15,400 |
| Lottery | $50,000 | $14,125 | $10,350 | $2,125 | $37,525 |
| Daily fantasy sports | $5,000 | $0 | $600 | $213 | $4,188 |
| Horse racing | $8,000 | $1,920 | $1,110 | $340 | $6,550 |
Questions
- Does Michigan tax gambling winnings?
- Yes, at a flat 4.25%.[1]
- Can you deduct gambling losses in Michigan?
- If you itemize federally, you can deduct the gambling losses you claimed on your federal return, so the 90% limit carries over; losses can't take winnings below zero.[2]
- Does Michigan withhold tax from gambling winnings?
- The Michigan Lottery withholds 4.25% from prizes over $5,000, whatever your residency. Casinos and racetracks withhold 4.25% only from nonresidents, on W-2G-reportable winnings; residents' winnings are reported, not withheld.[3]
- Do nonresidents pay Michigan tax on gambling winnings?
- Nonresidents owe Michigan tax on Michigan Lottery prizes and on winnings paid by Michigan casinos (commercial or tribal) and racetracks. Reciprocity agreements don't cover gambling winnings.[4]
Michigan by game
Sources
- [1] Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 · checked September 22, 2026
- [2] MCL 206.30(1)(bb) · checked September 22, 2026
- [3] MCL 206.703(6)-(8) · checked September 22, 2026
- [4] MCL 206.110(2)(c)-(d) · checked September 22, 2026
- [5] MCL 206.255 · checked September 22, 2026
- [6] MCL 141.612 (City Income Tax Act) · checked September 22, 2026
- [7] Michigan Gaming Control Board: March 2026 iGaming revenue · checked September 22, 2026
- [8] Michigan Treasury Notice: New Tax Treatment of Wagering Losses for Casual Gamblers (January 13, 2022) · checked September 22, 2026
- [9] Michigan Treasury FAQ: Am I required to file a Michigan return (reciprocal states)? · checked September 22, 2026