PA gambling taxes 2023
PA gambling taxes are the unfortunate downside to scoring wins.
Pennsylvania gambling tax law isn’t super-complicated from a gambler’s perspective, but there is some stuff you should know.
The hardest bit is getting the hang of what taxes you need to pay in Pennsylvania, and what you need to pay federally.
We cover all the main points for gambling taxes in PA, and this page should have your back in most situations.
If you’re hung up about a specific issue, it’s probably best to consult a professional to make sure you’re on the right side of the law.
Pennsylvania gambling tax for every type of gambling
In most cases, your PA gambling tax is going to be standardized. There’s a 24% federal tax rate on all gambling, plus the 3.07% income tax rate for Pennsylvania. That means if you win $10,000 on football betting and $10,000 on slots, your PA sports betting taxes and your PA online casino tax should be identical.
The 24% is a general number — in reality, it could go up to 35%, depending on your tax bracket.
So, is there any point discussing each gambling vertical individually? Actually, yes. It has to do with federal tax form W-2G.
When you win money at Pennsylvania casinos, sportsbooks, racetracks, etc., they usually withhold taxes on winnings automatically, but there are thresholds at which they need to send a W-2G to report your winnings to the IRS. These thresholds differ in each gambling vertical, so we’ll cover them individually.
If you qualify for a W-2G, it should be sent to you by your gambling retailer (sportsbook, casino, etc), and you should know when you’re meant to qualify, in case you don’t get one. That may leave you in hot water with the taxman.
Unlike many other states, the lottery has the same rate for income tax. You’ll be faced with the 24% + 3.07%. This makes winning the lottery in Pennsylvania more favorable than winning in New Jersey or New York, where lottery taxes can climb to 8% and 8.82%, respectively. You’ll be taxed on any winnings over $600, so expect your W-2G for any wins over that. Non-cash prizes for lottery are exempt from PA taxes. However, they are not exempt from federal taxes.
You’re taxed at the usual 24% + 3.07% rate. You’ll receive form W-2G if you win a minimum of $1,200 on slots, or profit $5,000 or more from a poker tournament — buy-in costs are deducted from winnings on poker tournaments for tax purposes. So if you enter a tournament with a $1,000 buy-in, you’d need to win $6,000 to qualify. If you play online at a legal PA casino, you can request a report of your wins and losses to itemize on your tax forms.
For Pennsylvania sports betting, you pay 24% federal tax, plus your 3.07% income tax. You’ll receive W-2Gs for wins of 300x or more, beginning with $600 on $2 bets. This kind of sports betting PA tax rate also applies to horse racing and pari-mutuel.
Other types of gambling
Again, 24% federal, plus 3.07% income. W-2Gs are applicable for wins of $1,200 or more on bingo, or $1,500+ for keno.
PA gambling winnings tax calculator — Summary
Below is a quick-reference guide for PA gambling tax and W-2G forms.
|Vertical||Federal gambling tax rate||Income tax rate (PA)||Winnings threshold for W-2G|
|Lottery (under $600)||N/A||N/A||N/A|
|Sports betting||24%||3.07%||$600, 300x wager|
|Pari-mutuel||24%||3.07%||$600, 300x wager|
|Poker tournaments||24%||3.07%||$5,000 (minus buy-in costs)|
How to pay taxes on gambling winnings in PA
Any gambling winnings are subject to both federal and Pennsylvania gambling taxes. Cash winnings are pretty straightforward, but any non-cash prizes require you to pay a ‘fair market value’ of tax, so you’ll need to have those estimated. Here, we’ll give you an overview of the important things to know to sort out your PA gambling tax.
If you’ve won a lot of money, we advise working with a financial professional to make sure you’re compliant with the law in all aspects.
- Make sure your gambling partner has your info — Whether you need to pay PA online casino tax, sports betting taxes, or anything else, the gambling organization usually needs to send you a W-2G. Make sure they have your ID and address.
- Prepare to receive your W-2G — You often won’t need to make federal tax payments yourself; the operator will withhold taxes automatically. However, you’ll still need to fill out forms. Your W-2G will act as proof of taxes paid, and you need to enter the info from it onto your 1040. Use our PA gambling winnings tax calculator to see if you qualify for a W-2G. If you do, and don’t receive it, contact your operator.
- Get hold of Form 1040 — You can find these on the IRS site. All gambling winnings go under ‘other income.’ You’ll usually opt for a From 1040 — Schedule 1, though there’s a 1040-SR for people over 65, and 1040-NR for those who aren’t citizens/permanent residents of the USA.
- Pennsylvania income tax forms — You’ll report your gambling winnings on PA-40 Schedule T. Then, report the total winnings from line 6 of the Schedule T on line 8 of your standard Pennsylvania income tax return (form PA-40). If you’re a Pennsylvania resident, and you’ve won money in a different state, it still counts towards your income tax in PA.
- Bonus tip; itemize deductions — This is optional, and it’s often easier to take the standard deduction. But you can deduct losses against winnings if they’re itemized, which could save a bit of cash. However, your deducted losses must be smaller or equal to your gambling winnings.
Federal tax form W-2G: a closer look
A W-2G tax form is there to keep record of your winnings. It shows what you’ve won, and highlights any winnings that were withheld for tax purposes. If you’ve won the qualifying amount of cash, your payer, be they a PA casino, sportsbook, or other operator, will send you a W-2G, and they’ll CC the IRS too.
You can check whether you’ve won a qualifying amount on the table in our winnings tax summary section. If you’ve qualified, but haven’t received your W-2G, make sure you contact the org who’s paying out your winnings. You’ll need it on tax day The IRS also advises you keep a diary of your wins and losses, and if possible, all gambling receipts.
While citizens pay taxes on winnings, sportsbooks and casinos are also paying tax on their income. Pennsylvania sports betting revenue has led to tons of money being available for state services.
What happens if you don’t report gambling winnings in PA?
You may be liable for penalties and fines, ones which could even have interest on them. You are legally obliged to pay taxes on income, whether it comes from gambling or your regular day job.
If your casino sends you a W-2G, they’re legally obliged to send one to the IRS too; so they know exactly what you’ve won, and how you won it.
We get it; no one likes paying their taxes, and if you won a $10,000 prize, you want to keep all of your $10,000. But don’t mess around with the IRS — not even The Joker will take them on!
More about PA gambling
The above casinos have been ordered according to how good their overall offering is for players from PA specifically. The expert score is based on their overall offering as a casino, regardless of state. This is why you'll see some casinos with lower scores ranked above casinos with higher scores.
We display some of the best options for PA online gambling. Our expert scores rate all aspects of a casino or sportsbook, and while great bonuses are important, they’re far from the only thing we consider.
This list of the best PA sportsbooks is curated according to what’s currently being offered for bettors in PA. The scores may not match the positions on this list; that’s because the scores are overall data-driven ratings based on the sportsbooks’ performance nationwide. The list on this page is ordered specifically for PA, based on the operator’s offering in the Keystone State.
Are there taxes on gambling winnings in PA?
Yes, gambling tax in Pennsylvania is something you’ll have to deal with. There isn’t a specific ‘PA gambling tax’, but there are federal gambling taxes which you’ll have to pay — it’s set at 24% for most tax brackets. In addition, any winnings will count towards your PA income tax of 3.07%.
How much tax do you pay on a $1,000 lottery ticket in PA?
It depends on your tax bracket. However, the standard tax will be 24% federal tax, plus 3.07% PA income tax.
What if I win money in a different state, or on a multi-state lottery?
If you are a PA resident, and you’ve won money on gambling in another state, you’re still obligated to pay PA income tax on your winnings. Multi-state lotteries like the Powerball will be taxed at the PA rate.
Are gambling losses deductible on my taxes?
Yes, but there’s a limit — you can’t deduct more than you win in a given year. So, if you’ve gambled $20,000 and won $5,000, only $5,000 are deductible. They’ll have to be itemized, and you’ll need to do so on line 28 of Form 1040 (Schedule A).
What if I win the lottery as part of a group?
It’s not a rare occurrence, so don’t you worry — there’s a system ready for that eventuality. You, and everyone else who won, will fill out form 5754. You don’t send it to the IRS though; return it to the gambling retailer who is paying you, and they’ll process them, then you’ll receive W-2Gs.
Is there a W-2G for table game winnings?
Casinos are not expected to keep track of your winnings on table games, but the IRS expects you to do so nonetheless. For other forms of gambling, you can check weather you should expect to receive a W-2G with out PA gambling winnings tax calculator.