Horse racing winnings tax in Pennsylvania
Pennsylvania taxes horse racing winnings as ordinary income at a flat 3.07%.
Updated · 2026 tax rules · How we calculate
You keep
$6,644
Cash at payout
$6,080
Total tax
$1,356
Over-withheld
$564
- Form W-2G
- Yes
- Federal withholding at payout
- $1,920
- Federal tax on the winnings
- $1,110
- State tax
- $246
- Over-withheld
- $564
- You keep
- $6,644
$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.
Pennsylvania taxes gambling winnings as ordinary income.
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 $1,356 in federal and state tax: an effective rate of 16.9%.
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
- Pennsylvania tax
- Pennsylvania taxes horse racing winnings as ordinary income at a flat 3.07%.[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]
- Pennsylvania withholding
- No Pennsylvania withholding requirement for horse racing winnings. Tax is due when you file.[5]Unverified
- Gambling losses
- You subtract the documented cost of your wagers for the year from your total winnings on Schedule T, without itemizing. The result can't go below zero or offset other income.[6]
- Visitors
- Pennsylvania taxes nonresidents on horse racing winnings won there, so visitors may need to file a nonresident return.[5]
What you keep at different amounts
For a single filer with $60,000 of other income and no gambling losses, living and winning in Pennsylvania.
| Won | W-2G | Withheld | Federal tax | State tax | You keep |
|---|---|---|---|---|---|
| $1,500 | No | $0 | $180 | $46 | $1,274 |
| $2,000 | Yes | $0 | $240 | $61 | $1,699 |
| $8,000 | Yes | $1,920 | $1,110 | $246 | $6,644 |
| $10,000 | Yes | $2,400 | $1,550 | $307 | $8,143 |
| $100,000 | Yes | $24,000 | $22,114 | $3,070 | $74,816 |
Assumes a $2 bet amount, so the 300x test is met at every amount shown.
Questions
- How much is Pennsylvania tax on horse racing winnings?
- Pennsylvania taxes horse racing winnings as ordinary income at a flat 3.07%.[1]
- Does Pennsylvania withhold tax from horse racing winnings?
- Pennsylvania has no withholding requirement for horse racing winnings. Tax is due when you file.[5]Unverified
- Do visitors pay Pennsylvania tax on horse racing winnings?
- Pennsylvania taxes nonresidents on horse racing winnings won there, so visitors may need to file a nonresident return.[5]
More for Pennsylvania
All of Pennsylvania'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] PA PIT Guide, Gambling and Lottery Winnings (PDF) · checked September 22, 2026
- [6] 2025 PA-40 Schedule T and instructions · checked September 22, 2026