Horse racing winnings tax in South Carolina
South Carolina taxes horse racing winnings as ordinary income at graduated rates from 1.99% to 5.21%.
Updated · 2026 tax rules · How we calculate
You keep
$6,473
Cash at payout
$5,663
Total tax
$1,527
Over-withheld
$810
- Form W-2G
- Yes
- Federal withholding at payout
- $1,920
- Federal tax on the winnings
- $1,110
- State tax
- $417
- South Carolina withholding at payout
- $417
- Over-withheld
- $810
- You keep
- $6,473
$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.
South Carolina taxes gambling winnings as ordinary income.
South Carolina requires the payer to hold back 5.21% 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 $1,527 in federal and state tax: an effective rate of 19.1%.
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
- South Carolina tax
- South Carolina taxes horse racing winnings as ordinary income at graduated rates from 1.99% to 5.21%.[1]Unverified
- 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]
- South Carolina withholding
- South Carolina withholds 5.21% on horse racing winnings of $500 or more.[5]Unverified
- Gambling losses
- No, starting in 2026. Act 110 replaced federal standard and itemized deductions with the South Carolina Income Adjusted Deduction, so itemized gambling losses no longer carry over.[6]Unverified
- Visitors
- South Carolina 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 South Carolina.
| Won | W-2G | Withheld | Federal tax | State tax | You keep |
|---|---|---|---|---|---|
| $1,500 | No | $78 | $180 | $78 | $1,242 |
| $2,000 | Yes | $104 | $240 | $104 | $1,656 |
| $8,000 | Yes | $2,337 | $1,110 | $417 | $6,473 |
| $10,000 | Yes | $2,921 | $1,550 | $521 | $7,929 |
| $100,000 | Yes | $29,210 | $22,114 | $5,210 | $72,676 |
Assumes a $2 bet amount, so the 300x test is met at every amount shown.
Questions
- How much is South Carolina tax on horse racing winnings?
- South Carolina taxes horse racing winnings as ordinary income at graduated rates from 1.99% to 5.21%.[1]Unverified
- Does South Carolina withhold tax from horse racing winnings?
- South Carolina withholds 5.21% on horse racing winnings of $500 or more.[5]Unverified
- Do visitors pay South Carolina tax on horse racing winnings?
- South Carolina taxes nonresidents on horse racing winnings won there, so visitors may need to file a nonresident return.[7]
More for South Carolina
All of South Carolina's gambling tax rules · Horse racing in every state
Sources
- [1] SCDOR, Information about H.4216 · 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] S.C. Code 12-8-530, Withholding on cash prizes or winnings · checked September 22, 2026
- [6] S.C. H.4216 / Act No. 110 of 2026 · checked September 22, 2026
- [7] S.C. Code 59-150-230, Lottery prizes · checked September 22, 2026