Horse racing winnings tax in Nebraska
Nebraska taxes horse racing winnings as ordinary income at graduated rates from 2.46% to 4.55%.
Updated · 2026 tax rules · How we calculate
You keep
$6,526
Cash at payout
$5,800
Total tax
$1,474
Over-withheld
$726
- Form W-2G
- Yes
- Federal withholding at payout
- $1,920
- Federal tax on the winnings
- $1,110
- State tax
- $364
- Nebraska withholding at payout
- $280
- Over-withheld
- $726
- You keep
- $6,526
$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.
Nebraska taxes gambling winnings as ordinary income.
Nebraska requires the payer to hold back 3.5% 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 $1,474 in federal and state tax: an effective rate of 18.4%.
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
- Nebraska tax
- Nebraska taxes horse racing winnings as ordinary income at graduated rates from 2.46% to 4.55%.[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]
- Nebraska withholding
- Nebraska withholds 3.5% whenever federal tax is withheld.[5]
- Gambling losses
- You can deduct gambling losses only if you itemize federally: Nebraska uses your federal Schedule A total (minus state and local income taxes), so the 90% limit carries over.[6]
- Visitors
- Nebraska 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 Nebraska.
| Won | W-2G | Withheld | Federal tax | State tax | You keep |
|---|---|---|---|---|---|
| $1,500 | No | $0 | $180 | $68 | $1,252 |
| $2,000 | Yes | $0 | $240 | $91 | $1,669 |
| $8,000 | Yes | $2,200 | $1,110 | $364 | $6,526 |
| $10,000 | Yes | $2,750 | $1,550 | $455 | $7,995 |
| $100,000 | Yes | $27,500 | $22,114 | $4,550 | $73,336 |
Assumes a $2 bet amount, so the 300x test is met at every amount shown.
Questions
- How much is Nebraska tax on horse racing winnings?
- Nebraska taxes horse racing winnings as ordinary income at graduated rates from 2.46% to 4.55%.[1]
- Does Nebraska withhold tax from horse racing winnings?
- Nebraska withholds 3.5% whenever federal tax is withheld.[5]
- Do visitors pay Nebraska tax on horse racing winnings?
- Nebraska taxes nonresidents on horse racing winnings won there, so visitors may need to file a nonresident return.[7]
More for Nebraska
All of Nebraska's gambling tax rules · Horse racing in every state
Sources
- [1] Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 · 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] Nebraska Circular EN (2026), Gambling Winnings From Nebraska Sources · checked September 22, 2026
- [6] 2025 Nebraska Individual Income Tax Booklet (Form 1040N lines 7-9) · checked September 22, 2026
- [7] Nebraska DOR Regulations Chapter 22 (REG-22-003.01I) · checked September 22, 2026