Existing law allows owners of a licensed horse racing facility to operate one card room located on the racetrack premises. You must generally report your winnings and losses separately, rather than reporting a net amount. Refer to Publication , Miscellaneous Deductions , for more information. Instructions for Form In other words, the state paying you unemployment benefits may find out whether you fail to report gambling winnings when required to do so. This revenue represents 5. Earned income includes income gained from performing work or by selling something.
State Unemployment Benefits
All of these bills died in committee without a public hearing. We surveyed 18 states that have commercial or Indian casinos and state income taxes. Of these, 15 allow taxpayers to deduct gambling losses from gambling winnings. Most of these deductions match the gambling loss deduction provisions of the federal income tax. Thus, winnings are included in federal adjusted gross income AGI.
If a taxpayer itemizes deductions for federal tax purposes, he may deduct his gambling losses for the year, up to the total amount of his gambling winnings for the same year.
The deductions may be noted on Schedule A, along with such other federal tax deductions as state and local taxes, charitable contributions, and home mortgage interest. The Connecticut state income tax is based on a taxpayer ' s federal AGI before deductions — Form , Line 33 and not his federal taxable income after deductions — Form , Line Thus, the state taxes gambling winnings but does not allow a taxpayer to offset winnings by deducting gambling losses.
The Connecticut income tax does not incorporate any federal deductions. A computer search of bills introduced since yielded seven proposed bills to amend the state income tax to mirror the federal income tax treatment of gambling losses. None of the bills was scheduled for a public hearing and all died in committee.
From these lists, we chose 18 states that have both casinos. Of these, 15 allow taxpayers to deduct gambling losses from gambling winnings when calculating state income tax liability. Ten of the states either 1 have state income tax provisions that are identical to the federal provision or 2 require taxpayers to calculate state liability starting from federal taxable income, thus automatically incorporating the federal deduction.
The remaining five exempt some or all of their state lottery income from state income tax and thus modify the total amount of winnings and deductible losses to exclude tax-exempt lottery winnings.
Of the three states other than Connecticut with no loss deduction, Mississippi exempts all in-state gambling income from taxation, so only Mississippi residents ' out-of-state gambling winnings are affected. Table 1 summarizes each state ' s gambling loss deduction. You may deduct gambling losses only if you itemize your deductions on Form , Schedule A.
The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. If you're a nonresident alien of the United States for income tax purposes and you have to file a tax return for U. Nonresident Alien Income Tax Return. Refer to Publication , U. Tax Guide for Aliens , and Publication , U. Tax Treaties , for more information.
Also, nonresident aliens of the United States can't deduct gambling losses. To deduct your losses, you must keep an accurate diary or similar record of your gambling winnings and losses and be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses.
Refer to Publication , Miscellaneous Deductions , for more information. For you and your family. Individuals abroad and more. EINs and other information. Get Your Tax Record. Bank Account Direct Pay. Debit or Credit Card.
Payment Plan Installment Agreement. Standard mileage and other information. Instructions for Form Request for Transcript of Tax Return.