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WinningsTax

Michigan gambling winnings tax calculator

Michigan taxes gambling winnings as ordinary income at a flat 4.25%.

Updated · 2026 tax rules · How we calculate

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$
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$
More options
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You keep

$8,025

Cash at payout

$7,600

Total tax

$1,975

Over-withheld

$425

Form W-2G
Yes

$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.

Federal withholding at payout
$2,400

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
$1,550

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

State tax
$425

Michigan taxes gambling winnings as ordinary income.

Over-withheld
$425

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
$8,025

$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] How the federal 90% loss rule works
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

  • Michigan gave casual gamblers no loss deduction until 2021 PA 168, which allowed losses itemized on the federal return from tax year 2021.[8]
  • Michigan's reciprocal agreements don't cover gambling or lottery winnings, so residents of reciprocal states owe Michigan tax on what they win there.[9]

Examples by game

For a single filer with $60,000 of other income and no gambling losses, living and winning in Michigan. Michigan ranks 22nd of 51 for what you keep from a $10,000 sports bet, and 22nd of 51 for a $1 million lottery prize, counting state tax only (Michigan's local income taxes aren't included). See every state ranked.

GameWonWithheldFederal taxState taxYou 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

Gambling across the border from Michigan

Win in a neighboring state and both states can tax it: the state you won in as a visitor, and Michigan as your home state, usually with a credit for the tax you paid there.

StateTop rateVisitors taxed
Indiana2.95%[10]Taxed[11]
Ohio2.75%[1]Some games[12]
Wisconsin7.65%[1]Some games[13]

Sources

  1. [1] Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 · checked September 22, 2026
  2. [2] MCL 206.30(1)(bb) · checked September 22, 2026
  3. [3] MCL 206.703(6)-(8) · checked September 22, 2026
  4. [4] MCL 206.110(2)(c)-(d) · checked September 22, 2026
  5. [5] MCL 206.255 · checked September 22, 2026
  6. [6] MCL 141.612 (City Income Tax Act) · checked September 22, 2026
  7. [7] Michigan Gaming Control Board: March 2026 iGaming revenue · checked September 22, 2026
  8. [8] Michigan Treasury Notice: New Tax Treatment of Wagering Losses for Casual Gamblers (January 13, 2022) · checked September 22, 2026
  9. [9] Michigan Treasury FAQ: Am I required to file a Michigan return (reciprocal states)? · checked September 22, 2026
  10. [10] Indiana DOR Departmental Notice #1 (2026) · checked September 22, 2026
  11. [11] Indiana IT-40PNR Booklet 2025 · checked September 22, 2026
  12. [12] 2025 Ohio IT 1040 Instructions / IT NRC Line 4 · checked September 22, 2026
  13. [13] Wisconsin Publication 600, Taxation of Gambling Income (03/26) · checked September 22, 2026