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WinningsTax

Sports betting winnings tax in New Mexico

New Mexico taxes sports betting winnings as ordinary income at graduated rates from 1.5% to 5.9%.

Updated · 2026 tax rules · How we calculate

$
$
$
$
More options
$

You keep

$7,980

Cash at payout

$7,000

Total tax

$2,020

Over-withheld

$980

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
$470

New Mexico taxes gambling winnings as ordinary income.

New Mexico withholding at payout
$600

New Mexico requires the payer to hold back 6% for state tax.

Over-withheld
$980

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
$7,980

$10,000 minus $2,020 in federal and state tax: an effective rate of 20.2%.

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 Mexico tax
New Mexico taxes sports betting winnings as ordinary income at graduated rates from 1.5% to 5.9%.[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 Mexico withholding
New Mexico withholds 6% on sports betting winnings of $2,000 or more.[5]
Gambling losses
Gambling losses count only through your federal itemized deductions, which New Mexico copies from your Form 1040, so the 90% limit carries over.[6]
Visitors
New Mexico taxes nonresidents on sports betting winnings won there, so visitors may need to file a nonresident return.[7]
Where to play
Sports betting in New Mexico: legal in person only. Winnings from a bet placed in another state are taxable here all the same.[8]

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 Mexico.

WonW-2GWithheldFederal taxState taxYou keep
$1,500No$0$180$71$1,250
$2,000No$120$240$94$1,666
$10,000Yes$3,000$1,550$470$7,980
$100,000Yes$30,000$22,114$4,855$73,031

Assumes a $25 stake on this bet, so the 300x test is met at every amount shown.

Questions

How much is New Mexico tax on sports betting winnings?
New Mexico taxes sports betting winnings as ordinary income at graduated rates from 1.5% to 5.9%.[1]
Does New Mexico withhold tax from sports betting winnings?
New Mexico withholds 6% on sports betting winnings of $2,000 or more.[5]
Do visitors pay New Mexico tax on sports betting winnings?
New Mexico taxes nonresidents on sports betting winnings won there, so visitors may need to file a nonresident return.[7]

More for New Mexico

All of New Mexico's gambling tax rules · Sports betting in every state

Sources

  1. [1] Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 · checked September 22, 2026
  2. [2] IRS, Instructions for Forms W-2G and 5754 (01/2026) · checked September 22, 2026
  3. [3] Federal Register, REG-113229-25 proposed rule (Apr. 17, 2026) · checked September 22, 2026
  4. [4] 26 U.S. Code § 3402 (withholding) · checked September 22, 2026
  5. [5] FYI-104 New Mexico Withholding Tax (Rev. 11/2025, effective Jan 1, 2026) · checked September 22, 2026
  6. [6] 2025 PIT-1 Instructions, Line 12 · checked September 22, 2026
  7. [7] 2025 PIT-B Instructions, Line 7 · checked September 22, 2026
  8. [8] Fox Sports, Where is sports betting legal? · checked September 22, 2026