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WinningsTax

Minnesota gambling winnings tax calculator

Minnesota taxes gambling winnings as ordinary income at graduated rates from 5.35% to 9.85%.

Updated · 2026 tax rules · How we calculate

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More options
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You keep

$7,770

Cash at payout

$7,600

Total tax

$2,230

Over-withheld

$170

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
$680

Minnesota taxes gambling winnings as ordinary income.

Over-withheld
$170

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
$7,770

$10,000 minus $2,230 in federal and state tax: an effective rate of 22.3%.

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 Minnesota taxes gambling winnings

State income tax
Minnesota taxes gambling winnings as ordinary income at graduated rates from 5.35% to 9.85%.[1]
Gambling losses
You can deduct gambling losses, up to your winnings, only by claiming Minnesota itemized deductions (Schedule M1SA), which you can do even if you don't itemize federally. Minnesota's 2026 conformity law adopts the federal 90% limit, and gambling losses can't be deducted for the Minnesota alternative minimum tax.[2] How the federal 90% loss rule works
Withholding
The Minnesota State Lottery withholds 7.25% when federal withholding applies (generally prizes over $5,000). No other payer is required to withhold, so tax on other winnings is due when you file.[6]
Nonresidents
Nonresidents owe Minnesota tax on Minnesota winnings and must file Form M1 with Schedule M1NR if they meet the filing threshold. Reciprocity with Michigan and North Dakota doesn't cover gambling winnings.[4]
Tax paid to other states
Residents who paid another state's income tax on the same winnings may qualify for Minnesota's credit for taxes paid to another state.[4]
Legal gambling
Sports betting: not legal. State lottery: yes. Casinos: yes. Online casino: not legal.[7]

Also worth knowing

  • Minnesota doesn't allow gambling losses in figuring its alternative minimum tax, so big winners who itemize losses may owe Minnesota AMT even without federal AMT.[4]
  • Gambling winnings aren't covered by Minnesota's reciprocity agreements with Michigan and North Dakota, so residents of those states owe Minnesota tax on them.[4]

Examples by game

For a single filer with $60,000 of other income and no gambling losses, living and winning in Minnesota. Minnesota ranks 48th of 51 for what you keep from a $10,000 sports bet, and 49th of 51 for a $1 million lottery prize. See every state ranked.

GameWonWithheldFederal taxState taxYou keep
Sports betting$10,000$2,400$1,550$680$7,770
Casino and slots$5,000$0$600$340$4,060
Table games$5,000$0$600$340$4,060
Poker tournaments$20,000$0$3,750$1,360$14,890
Lottery$50,000$15,625$10,350$3,400$36,250
Daily fantasy sports$5,000$0$600$340$4,060
Horse racing$8,000$1,920$1,110$544$6,346

Questions

Does Minnesota tax gambling winnings?
Yes, at graduated rates from 5.35% to 9.85%.[1]
Can you deduct gambling losses in Minnesota?
You can deduct gambling losses, up to your winnings, only by claiming Minnesota itemized deductions (Schedule M1SA), which you can do even if you don't itemize federally. Minnesota's 2026 conformity law adopts the federal 90% limit, and gambling losses can't be deducted for the Minnesota alternative minimum tax.[2]
Does Minnesota withhold tax from gambling winnings?
The Minnesota State Lottery withholds 7.25% when federal withholding applies (generally prizes over $5,000). No other payer is required to withhold, so tax on other winnings is due when you file.[6]
Do nonresidents pay Minnesota tax on gambling winnings?
Nonresidents owe Minnesota tax on Minnesota winnings and must file Form M1 with Schedule M1NR if they meet the filing threshold. Reciprocity with Michigan and North Dakota doesn't cover gambling winnings.[4]

Minnesota by game

Gambling across the border from Minnesota

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

StateTop rateVisitors taxed
Iowa3.8%[8]Taxed[9]
North Dakota2.5%[8]UnverifiedTaxed[10]
South DakotaNo income tax[8]No
Wisconsin7.65%[8]Some games[11]

Sources

  1. [1] Minnesota Department of Revenue: Minnesota Income Tax Rates and Brackets · checked September 22, 2026
  2. [2] Minn. Stat. § 290.0122, Itemized deductions · checked October 2, 2026
  3. [3] Laws of Minnesota 2026, chapter 128 · checked October 2, 2026
  4. [4] Minnesota Department of Revenue, Gambling Winnings · checked October 2, 2026
  5. [5] Minnesota Department of Revenue, Tax Law Changes · checked October 2, 2026
  6. [6] Minn. Stat. 290.92, subd. 29 · checked September 22, 2026
  7. [7] Minnesota DPS Alcohol and Gambling Enforcement: Gambling · checked September 22, 2026
  8. [8] Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 · checked September 22, 2026
  9. [9] Iowa DOR: Iowa Tax On Gambling · checked September 22, 2026
  10. [10] ND Tax Commissioner Guideline - Income Taxation of Nonresident Aliens · checked September 22, 2026
  11. [11] Wisconsin Publication 600, Taxation of Gambling Income (03/26) · checked September 22, 2026