Louisiana Gambling Winnings Tax Calculator: LA Gambling Tax Laws Explained
Did you know that gambling winnings in Louisiana are classed as taxable income? That’s right – whether you’re a Louisiana sports betting enthusiast or a regular at the Pelican State’s many commercial and tribal casinos, you need to declare all winnings from gambling as income and pay taxes. In this guide, we’ll cover everything you need to know about taxes on gambling winnings so you’re covered once tax season rolls around.
Louisiana Gambling Tax Calculator
A Louisiana gambling winnings tax calculator is a very simple and convenient tool that helps you figure out how much tax you will need to pay on your gambling income. You can calculate your taxes by individual win or by your combined gambling income for the year. All you need to do is pop your information in the calculator below.
Remember that you should only use your total winnings less your stake when using the calculator to figure out your taxable income. This is because there is no tax payable on the amount that you originally wagered. You only pay gambling taxes on profits, whether they are from casinos or Louisiana sports betting apps.
Are Gambling Winnings Subject To Income Taxes In Louisiana?
Yes, according to state laws, all gambling winnings are considered taxable income. Casinos and sportsbooks are required to withhold taxes on gambling income as noted in policy LAC 61:I.1525. This states that the gambling operator must withhold tax on winnings at the highest individual rate of tax. However, casinos have simply set their flat state income tax rate at 6% on all winnings above the threshold of $1,200 for slot machines. Meanwhile, sportsbooks must withhold taxes on winnings above $600 at the highest individual state income tax rate, which is 4.25% as of May 2024.
You then must pay federal tax on your winnings. All gambling operators that pay out winnings above a certain threshold (depending on the betting activity) generally will withhold 24% federal tax regardless of how much you are required to pay as determined by your taxable income.
The one exception to this rule is when it comes to lottery winnings over winning big using Louisiana sportsbook promos. Any lottery winnings that are below $600 are not subject to any taxes whatsoever. Anything above this threshold is subject to both state and federal tax.
What Are The Gambling Tax Rates In Louisiana?
Remember that all gambling winnings are considered taxable income regardless of your filing status. For this reason, the following tax rates are applicable to gambling winnings:
It’s important to note that the tax rates above only cover Louisiana gambling taxes. You must also pay federal income taxes on all of your gambling winnings. The standard federal tax rates range from 10% through 37% and are based on your income. If you have paid a flat federal tax rate of 24% on your gambling winnings, and that was withheld by the casino or sportsbook, then your actual federal tax rate will be calculated at the end of the year based on your total income for the taxable period. This is because the withholding tax is an estimated tax only.
How Does The IRS Know If You Won Money Gambling?
Gambling winnings at all casino slot machines, in poker tournaments, at sportsbooks and even through sports betting apps like BetMGM Louisiana are monitored closely by all operators, and this includes lottery winnings. Once your gambling profits are high enough to become income subject to taxes, the operator is obliged to issue you with a W-2 G form. This must be filled out by you, the gambler, with all winnings declared on the form as taxable income. The operator then will retain the form and pass it on to the IRS at the end of the tax year. The IRS will check your tax return against any W-2 G forms issued to you by casinos or sportsbooks, and your paid taxes on gambling in Louisiana. This is how the IRS knows how much you have won through gambling and how much should appear on your federal tax return.
The thresholds for any gambling win are as follows:
If your gambling win is under those thresholds, you do not have to fill out a W-2 G form and your winnings will not be subjected to a withholding tax. However, this does not mean that your winnings are not taxable income. Remember, that all your cumulative winnings must be included in your federal tax return at the end of the year. It is this final figure that is then subject to the federal tax rate as per your overall income. If you're having difficulty figuring out what you owe, make sure to use a gambling tax calculator to help your pay estimated tax on your total income from gambling activity.
It’s very important that you always declare all of your gambling income as taxable income regardless of your filing status. Any discrepancies at the end of the year could land you in trouble with the local authorities and the Internal Revenue Service.
How To Declare And Report Louisiana Gambling Winnings For Taxes
Any income from a gambling win is considered taxable income, not only by the Louisiana Department of Revenue but also by the IRS. This means that you must declare and report your gambling winnings as taxable income no matter how big or small they might be. It's also why a tax calculator like the one in this guide is incredibly handy.
If you are a regular at one of Louisiana's many casinos, then chances are you’re familiar with the W-2 G form. This form is automatically issued to gamblers who have winnings above the thresholds we mentioned earlier. So, for example, if you hit a jackpot on the slots and win $10,000 – or hit it big with a futures bet on Saints' Super Bowl odds – this will trigger the issuance of a W-2 G form. As per the instructions on the form, the casino must withhold a certain percentage of your winnings for both state and federal taxes. This is an estimated tax and not necessarily the actual tax amount that you will pay on your federal income tax return.
In many cases, gamblers may go through an entire year winning smaller amounts that do not trigger the issuance of the W-2 G form. For example, you might win multiple bets on a sports betting app like Caesars Sportsbook Louisiana that never go above the $600 threshold for a W-2 G. This is why it’s crucial that you keep track of all of your gambling winnings throughout the year. When it is time to file your taxes, you must enter the total amount of your winnings on form 1040 as "Other Income." This will then be added to your total income before your federal and state taxes for the year are calculated.
Remember that you do not need to include your stake amount when calculating your winnings. For example, if you place a $10 wager on a sporting event at odds of +200 you would receive $30 ($10 stake + $20 winnings). You would declare your winnings as $20 despite receiving a $30 payout.
If you are unsure about anything in this guide, it should help to speak with a tax professional.
What To Do If You Do Not Receive A W-2 G Form In Louisiana
Gambling winnings that exceed the thresholds mentioned above will trigger the issuance of a W-2 G form. This is a requirement by law. But if you do not receive a W-2 G, you still must pay state income taxes and federal income taxes on your winnings.
Regardless of whether or not you receive a W-2 G, it’s a good idea to keep any receipts for gambling winnings or to keep gambling records of your activity through online sportsbooks. This will allow you to enter the correct amount on your Form 1040 when it’s time to file your federal and state taxes. While there are endless guides available telling you how to manage your gambling activity, very few will tell you that keeping a gambling log to record your winnings and losses is one of the most important things that you can do. Any mistake on your part could trigger an audit by the IRS, and that’s the last thing that you want to go through. It's also a good idea to use a tax calculator like the one in this guide to give you an accurate idea of tax rates and how much taxes you will need to pay.
Can I Deduct Gambling Losses In Louisiana?
Unfortunately, the deduction for gambling losses was repealed in Louisiana in 2021. Act 395 was signed into law and came into effect December 31, 2021. As a result of the legislation, tax-deductible items are now limited to medical expenses. This means that, no, you cannot deduct gambling losses from your taxable income in the state of Louisiana.
However, for federal income tax, the IRS will allow you to deduct your losses up to the amount of your winnings. This means that if your losses for the year totaled $5,000 and your winnings totaled $7,000, your taxable income from gambling winnings would be $2,000. You will need to deduct the losses separately on your Form 1040 as an itemized deduction. To qualify as a deductible gambling loss, you must include a record of the time and date of the loss, the business where the loss occurred and any supporting documentation such as receipts, etc. If you're feeling a little unsure about the correct process, speak to a tax professional.
What If I Lost More Than I Won Gambling?
With regard to state taxes in Louisiana, it’s irrelevant how much you lost – you must pay taxes on all your winnings. As for federal taxes, the IRS will allow you to deduct losses that are less than or equal to your winnings. So if, for example, you won $5,000 but lost $6,000, you can deduct $5,000. The remaining $1,000 is not an expense or tax liability.
Louisiana Lottery Taxes
Lottery winnings are treated the same as all other forms of gambling winnings at both federal and state level. Any lottery winnings below $600 do not have to be declared, while prizes that are $5,000 or more will trigger an automatic withholding tax of 24% – the federal tax rate – and 4.25% for state taxes. The federal rate jumps to 37%, while any non-US citizens will be hit with a flat rate of 30% for any lottery winnings. All lottery winnings above $600 will trigger a W-2 G.
However, even if you do have to pay withholding taxes when collecting your lump-sum payment, you may be entitled to a partial refund at the end of the tax year depending on your filing status, how much you earn and how much tax you have paid. If you are unsure of how much you owe, speak to a tax professional or make use of a lottery tax calculator.
How Are Group Lottery Wins Taxed In Louisiana?
If you are part of a group that has won a lottery prize, then you must still pay taxes in much the same way an individual would. If the prize is above the $5,000 threshold, all people within the group will need to fill out a W-9 form that shows their share of the lottery winnings. The Louisiana Lottery will not pay out lottery winnings in individual shares but instead as a lump sum payout in the form of a single check to one person or a legal entity such as a trust.
The person or entity that receives the lump sum payout then can complete a Federal Tax Form 5754. This form details how lottery winnings are shared among group members. Upon receipt of this form, the lottery then can issue W-2 G forms for each individual winner. This will include the lottery winnings and the taxes withheld on their behalf.
Taxes On Multi-State Lottery Wins
Louisiana state laws on lottery winnings are the same for local lotteries and multi-state lotteries (such as the Powerball or Mega Millions). All lottery winnings above $600 are subject to state and federal taxes regardless. The Louisiana State Lottery automatically will withhold income taxes on lottery winnings and any lump sum payment that are taxable. If your prize is under $600, then you have no taxes to pay.
What Happens If I Don’t Report My Gambling Winnings?
If you don’t report your gambling winnings on your yearly tax return, you could be in a lot of trouble. This is a serious offense and is tantamount to income tax fraud regardless of your filing status. As I have mentioned several times, all winnings from gambling are subject to both federal tax and state tax. The only exceptions to this rule are lottery prizes below the $600 threshold for gambling taxes Louisiana.
Reporting gambling winnings as income is a legal requirement, and failing to do so will result in an audit by the IRS. This could lead to legal action at both state and federal level for non-payment of income tax. As you can imagine, this is not something that will look good on your record, and it could have serious implications for your credit rating. Remember also that the IRS will have detailed records of your gambling winnings from any W-2 G forms issued by gambling operators. Even without those forms, it’s highly likely that the IRS will at some point discover your undeclared gambling winnings and failure to pay the relevant income tax.
References
Louisiana Gambling Winnings Tax Calculator FAQ
Gambling losses are non-deductible for state taxes in Louisiana. However, you can deduct your losses when paying federal taxes. Total losses less than or equal to your total winnings for the year can be entered on your 1040 tax form and federal income tax return as tax deductibles.
Gambling winnings for tax purposes can be calculated by subtracting the original amount wagered from the amount paid out to you. For example, if you wager $10 and your payout is $30, you can subtract your stake of $10 to get your taxable winnings.
All gambling winnings are subject to Louisiana state taxes as well as federal income taxes. The only exceptions to this rule are lottery prizes under $600. Prizes under this threshold do not need to be declared for income tax purposes.
Gambling losses are not considered a tax deduction for state taxes in Louisiana. However, you can deduct losses on federal income tax returns. This can be done by listing losses as itemized deductions on your 1040 tax form. You will need records to prove the time, place and amount of each loss.
All gambling winnings in the state of Louisiana must be declared as income. They are then taxed at the individual tax rate, varies by income level and ranges from from 1.85% to 4.25%. Federal income tax must also be paid on the full amount of your winnings. The Federal tax rate is based on your total income.
No, gambling losses are not considered a tax deduction for state taxes in Louisiana. They are, however, deductible from your federal taxes. Losses less than or equal to your total gambling winnings can be entered as an itemized deduction on your federal income tax return.
Author
Ciaran has written for both the sports betting and iGaming industries for more than a decade. He is a true sports fanatic, and he covers a wide range of sports and casinos for sites including LouisianaBets.com, but his first love always will be soccer.
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