Sports betting winnings tax in New Jersey
New Jersey taxes sports betting winnings as ordinary income at graduated rates from 1.4% to 10.75%.
Updated · 2026 tax rules · How we calculate
You keep
$7,898
Cash at payout
$7,300
Total tax
$2,103
Over-withheld
$598
- Form W-2G
- Yes
- Federal withholding at payout
- $2,400
- Federal tax on the winnings
- $1,550
- State tax
- $553
- New Jersey withholding at payout
- $300
- Over-withheld
- $598
- You keep
- $7,898
$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.
New Jersey taxes gambling winnings as ordinary income.
New Jersey requires the payer to hold back 3% 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.
$10,000 minus $2,103 in federal and state tax: an effective rate of 21%.
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
- New Jersey tax
- New Jersey taxes sports betting winnings as ordinary income at graduated rates from 1.4% to 10.75%.[1]
- Federal tax form
- Sports betting 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 sports betting winnings of more than $5,000, but only when the win is also at least 300 times the wager.[2]
- New Jersey withholding
- New Jersey withholds 3% whenever federal tax is withheld.[5]Unverified
- Gambling losses
- You can subtract gambling and lottery losses from the same year from your winnings on NJ-1040 line 24 without itemizing, down to zero. The federal 90% limit doesn't apply.[6]
- Visitors
- New Jersey taxes nonresidents on sports betting winnings won there, so visitors may need to file a nonresident return.[5]
- Where to play
- Sports betting in New Jersey: legal online and in person. Winnings from a bet placed in another state are taxable here all the same.[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 New Jersey.
| Won | W-2G | Withheld | Federal tax | State tax | You keep |
|---|---|---|---|---|---|
| $1,500 | No | $0 | $180 | $83 | $1,237 |
| $2,000 | No | $0 | $240 | $111 | $1,650 |
| $10,000 | Yes | $2,700 | $1,550 | $553 | $7,898 |
| $100,000 | Yes | $27,000 | $22,114 | $6,235 | $71,651 |
Assumes a $25 stake on this bet, so the 300x test is met at every amount shown.
Questions
- How much is New Jersey tax on sports betting winnings?
- New Jersey taxes sports betting winnings as ordinary income at graduated rates from 1.4% to 10.75%.[1]
- Does New Jersey withhold tax from sports betting winnings?
- New Jersey withholds 3% whenever federal tax is withheld.[5]Unverified
- Do visitors pay New Jersey tax on sports betting winnings?
- New Jersey taxes nonresidents on sports betting winnings won there, so visitors may need to file a nonresident return.[5]
More for New Jersey
All of New Jersey's gambling tax rules · Sports betting 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] NJ Division of Taxation - Lottery and Gambling Winnings · checked September 22, 2026
- [6] 2025 NJ-1040 Instructions, Line 24 and income category rules · checked September 22, 2026
- [7] NJ Division of Gaming Enforcement · checked September 22, 2026