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
You keep
$7,866
Cash at payout
$7,600
Total tax
$2,134
Over-withheld
$266
- Form W-2G
- Yes
- Federal withholding at payout
- $2,400
- Federal tax on the winnings
- $1,550
- State tax
- $584
- Over-withheld
- $266
- You keep
- $7,866
$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.
Vermont 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.
$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 at federal AGI and allows only its own standard deduction, so gambling losses you itemize federally don't carry over.[2]Unverified
- 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.[3]Unverified
- Nonresidents
- Yes. Nonresidents owe Vermont tax on wagers made in Vermont and on lottery tickets bought in Vermont.[5]
- Tax paid to other states
- Yes. Residents can claim a credit for income tax paid to another state on Schedule IN-117.[2]Unverified
- Legal gambling
- Sports betting: legal online and in person. State lottery: yes. Casinos: no. Online casino: not legal.[6]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.[6]
- 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.[3]
Examples by game
For a single filer with $60,000 of other income and no gambling losses, living and winning in Vermont.
| Game | Won | Withheld | Federal tax | State tax | You 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 at federal AGI and allows only its own standard deduction, so gambling losses you itemize federally don't carry over.[2]Unverified
- 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.[3]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.[5]
Vermont by game
Sources
- [1] Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 · checked September 22, 2026
- [2] Vermont 2025 Form IN-111 Instructions · checked September 22, 2026
- [3] Vermont Lottery, What If I Win · checked September 22, 2026
- [4] 32 V.S.A. § 5841 · checked September 22, 2026
- [5] 32 V.S.A. § 5823 · checked September 22, 2026
- [6] Vermont Act 63 of 2023 (sports wagering), as enacted · checked September 22, 2026