PA Sports Betting Taxes
In 2017, Gov. Tom Wolf signed H 271 into law, enabling Pennsylvanians to enjoy online casino gambling. Anyone aged 21 and over, from that point on, was allowed to place sports bets over the internet or in person at Pennsylvania’s casinos, racetracks, and former racetracks.
Online casino winnings are subject to the Pennsylvania’s Gross Income Tax, including all other forms of gambling (sports betting, racetrack, lotto, etc.).
Federal Tax Form W2-G for Casinos and Bookies
All Pennsylvania-licensed casinos and racetracks, must report gambling winnings to the IRS on Form W2-G. This includes all partnered online casinos and online sportsbooks. The physical licensed establishment will report these figures.
How Much are PA Casino Winnings Taxed?
Gambling winnings from a Pennsylvania location are taxable to residents and non-residents. This includes online sports betting and placing bets at casinos and racetracks. The amount of tax you owe on your gambling winnings, is based on your taxable income bracket.
As stated by the Pennsylvania Department of Revenue, players can use gambling losses to offset gambling winnings from the same year as long as they do not exceed total winnings. Losses that equate to more than earning, cannot be reported as a negative figure on the Pennsylvania tax return.
If you report gambling winnings (net of losses) on your Pennsylvania return, you must attach a supporting statement indicating your total winnings and losses. Residents and nonresidents use PA-40 Schedule T, Gambling and Lottery Winnings (PDF) to report amount(s) of gambling and lottery winnings..
- The following gambling and lottery winnings, in Pennsylvania, are taxable:
- The value of property (automobiles, jewelry, electronic devices, appliances, clothes, etc.)
- The value of the use of property (trips, vacations, airline tickets, cruise, etc.)
- Other items of value
Your Responsibility to Declare Winnings
The PA establishment must submit Form W2-G and if necessary, withhold the appropriate tax from your winnings. Either way, if they do submit it or not, you will need to report your net gambling winnings as income on your tax return (along with loss offsets).
If you do receive Form W-2G from a gambling operator, you must not ignore it. File your tax return and categorize this income appropriately. Otherwise, the IRS may be in touch with you.