Massachusetts Gambling Taxes Overview

Are Gambling Winnings Taxable in Massachusetts?

Gambling winnings in Massachusetts are taxable, if they meet certain thresholds. As your financial situation improves, both the IRS and the State of Massachusetts consider your winnings income. Therefore, winnings are taxed like income from any other source. It makes no difference whether you won while playing at a real money casino or on a sports bet, in-person or online.

The reporting thresholds for gambling winnings are:

• $600 or more when the amount won is at least 300 times your original stake.

• $1,200 or more on slot machines.

• $1,500 or more while playing Keno.

• $5,000 or more in a poker tournament.

Like with all other income, it’s the responsibility of gamblers to accurately report their winnings and pay any necessary taxes. It’s also important to note that whether you actually profited from your play is meaningless. The IRS and Massachusetts consider your winnings to be income no matter how much you spent to secure them.

Online Gambling Taxes in Massachusetts

As previously mentioned, the IRS and Massachusetts consider your winnings from online gambling taxable income. That applies regardless of whether you won money playing an online casino or betting on sports. The mandatory reporting requirements apply just the same.

One benefit of online gambling is that playing online makes it very easy to track your activity in a tax year and ensure that you have paid your tax correctly. Your account with an online Massachusetts sportsbook acts as a ledger of your activity and makes it easy to report your winnings.

How Much Are Gambling Winnings Taxed?

Your tax rate for your gambling winnings depends on how much you made in terms of taxable income from all sources. Again, the IRS and Massachusetts simply consider gambling winnings another form of income.

Massachusetts assesses a flat tax on residents’ income of 5%. That, of course, is in addition to your federal tax liability for the IRS. For Tax Year 2023, the IRS assesses a graduated income tax. That means you pay a higher rate on the top end of your income for the year.

Those thresholds and rates are:

Reporting Gambling Taxes in Massachusetts

Reporting your gambling winnings to the appropriate agencies can be very easy. In many cases, it’s simply a matter of transferring numbers from one document to another. The casino, sportsbook, etc. often does the math for you and shares exactly what you need to know.

• Do I Need to Report My Winnings?

While reporting thresholds do apply, it’s best to air on the side of caution in this regard. The IRS and Massachusetts Dept. of Revenue consider your qualifying gambling winnings income no matter how you won them or whether you actually made a profit.

• How Do I Report My Winnings?

For your federal taxes, you will need a Schedule 1 and Form 1040. For your Massachusetts return, you might need a Schedule X depending on whether you won playing the lottery or another gambling type. You will definitely need your Massachusetts Form 1.

• Do I Report Gambling Losses?

You can deduct some of your gambling losses on your federal and/or Massachusetts tax returns but only if you itemize your deductions. Do note, though, that this only benefits you if the total of your deductions exceed the value of the standard deduction for your tax situation.

Federal Taxes & W2-G Form

The W-2G is the form that can simplify everything for reporting your gambling winnings. By law, if your cumulative gambling winnings for the entire year meet the mandatory reporting thresholds, the casino/lottery/sportsbook will complete this form in regards to your activity. They will send you and the IRS a copy.

When you complete your Form 1040 for your federal return, use the W-2G form(s) you receive and put that or those amount(s) on Line 8b of your Schedule 1. Then, transfer that number to Line 8 of your Form 1040. In most circumstances, that satisfies your reporting obligation for your federal income taxes as far as gambling winnings go.

Note that if you have more than one W-2G forms for the same year, you’ll need to add all the winnings reported on those forms up to place on Schedule 1 Line 8b. Otherwise, you risk underreporting. Also, if you don’t receive a W-2G form, that doesn’t mean you’re off the hook for reporting – It’s still your responsibility to accurately report winnings.

Further Information

• Mass.gov (Department of Revenue) – Learn about gambling and the lottery in Massachusetts, as well as important updates around regulation and legislation. (617) 887-6367.

• Internal Revenue Service – Find advice on how to declare your gambling winnings and receive help with legally filing your tax return. (800) 829-1040.