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WinningsTax

Vermont gambling winnings tax calculator

Vermont taxes gambling winnings as ordinary income at graduated rates from 3.35% to 8.75%.

Updated · 2026 tax rules · How we calculate

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$
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More options
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You keep

$7,866

Cash at payout

$7,600

Total tax

$2,134

Over-withheld

$266

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
$584

Vermont taxes gambling winnings as ordinary income.

Over-withheld
$266

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
$7,866

$10,000 minus $2,134 in federal and state tax: an effective rate of 21.3%.

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.

How Vermont taxes gambling winnings

State income tax
Vermont taxes gambling winnings as ordinary income at graduated rates from 3.35% to 8.75%.[1]Unverified
Gambling losses
No. Vermont starts from federal adjusted gross income and allows its own standard deduction plus only one federal itemized deduction, for medical expenses. Gambling losses you itemize federally don't carry over.[2] How the federal 90% loss rule works
Withholding
The Vermont Lottery withholds 6% Vermont tax on prizes over $5,000. Other payers that withhold federal tax must also withhold Vermont tax, but the rate sportsbooks use was not found.[4]Unverified
Nonresidents
Yes. Nonresidents owe Vermont tax on wagers made in Vermont and on lottery tickets bought in Vermont.[6]
Tax paid to other states
Yes. Residents can claim a credit for income tax paid to another state on Schedule IN-117.[3]Unverified
Legal gambling
Sports betting: legal online and in person. State lottery: yes. Casinos: no. Online casino: not legal.[7]Unverified

Also worth knowing

  • Act 63 of 2023 (sports wagering) made proceeds from any wager placed in Vermont Vermont-source income for nonresidents and lets the Tax Commissioner require withholding on wagering and lottery proceeds.[7]
  • The Vermont Lottery withholds 24% federal and 6% Vermont tax on prizes over $5,000; for nonresident aliens it withholds 30% federal and 7.2% Vermont.[4]

Examples by game

For a single filer with $60,000 of other income and no gambling losses, living and winning in Vermont. Vermont ranks 44th of 51 for what you keep from a $10,000 sports bet, and 47th of 51 for a $1 million lottery prize. See every state ranked.

GameWonWithheldFederal taxState taxYou keep
Sports betting$10,000$2,400$1,550$584$7,866
Casino and slots$5,000$0$600$254$4,146
Table games$5,000$0$600$254$4,146
Poker tournaments$20,000$0$3,750$1,244$15,006
Lottery$50,000$15,000$10,350$3,224$36,426
Daily fantasy sports$5,000$0$600$254$4,146
Horse racing$8,000$1,920$1,110$452$6,438

Questions

Does Vermont tax gambling winnings?
Yes, at graduated rates from 3.35% to 8.75%.[1]Unverified
Can you deduct gambling losses in Vermont?
No. Vermont starts from federal adjusted gross income and allows its own standard deduction plus only one federal itemized deduction, for medical expenses. Gambling losses you itemize federally don't carry over.[2]
Does Vermont withhold tax from gambling winnings?
The Vermont Lottery withholds 6% Vermont tax on prizes over $5,000. Other payers that withhold federal tax must also withhold Vermont tax, but the rate sportsbooks use was not found.[4]Unverified
Do nonresidents pay Vermont tax on gambling winnings?
Yes. Nonresidents owe Vermont tax on wagers made in Vermont and on lottery tickets bought in Vermont.[6]

Vermont by game

Gambling across the border from Vermont

Win in a neighboring state and both states can tax it: the state you won in as a visitor, and Vermont as your home state, usually with a credit for the tax you paid there.

StateTop rateVisitors taxed
Massachusetts9%[8]UnverifiedTaxed[9]
New HampshireNo income tax[1]No
New York10.9%[1]Taxed[11]

Sources

  1. [1] Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 · checked September 22, 2026
  2. [2] 32 V.S.A. § 5811. Definitions (Vermont Statutes Online) · checked October 2, 2026
  3. [3] Vermont 2025 Form IN-111 Instructions · checked October 2, 2026
  4. [4] Vermont Lottery, What If I Win · checked September 22, 2026
  5. [5] 32 V.S.A. § 5841 · checked September 22, 2026
  6. [6] 32 V.S.A. § 5823 · checked September 22, 2026
  7. [7] Vermont Act 63 of 2023 (sports wagering), as enacted · checked September 22, 2026
  8. [8] Sage Knowledgebase, Massachusetts 2026 withholding (relaying DOR Circular M) · checked September 22, 2026
  9. [9] M.G.L. c. 62, s. 5A · checked September 22, 2026
  10. [10] NH RSA Chapter 77 (repealed effective January 1, 2025) · checked September 22, 2026
  11. [11] NY Tax Law §631 · checked September 22, 2026