11-05-2021

Indiana State Tax On Gambling Winnings

The amount of the win is $2,000, not $2,300. Indiana does not allow gambling losses to be deducted on their state income tax returns, so this is an issue for my client. (This can be an issue for individuals on federal returns, too. Gambling losses are an itemized deduction. My pension is from a company based in another state. What state is it taxed in? I worked in Indiana six months. Then I worked six months in another state. How should I file my Indiana taxes? I need more time to file my taxes and I think I will owe the Department. What should I do? I have a gambling loss that I took on my federal return. Sep 18, 2019 How much are my gambling winnings taxed in Indiana? Effective for tax years after 2017, the federal rate on winnings over $5,000 is 24%. Winnings under that benchmark of $5,000 must also be reported depending on their amounts and sources. Currently, Indiana’s personal income tax rate is 3.23%. Almost all gambling winnings are subject to this tax.

There are many credits available to claim on your Indiana income tax return.

Information Bulletin #59 lists all the credits available to Indiana taxpayers. Also, the IT-40 instruction booklet (IT-40PNR instruction booklet) has more detailed information about the credits available to be claimed on the income tax return.

Below is a list and a brief discussion of the more commonly claimed credits:

College Credit

If you donated money or property to an Indiana college or university, you may be able to take a credit.

  • For an individual filing a single return, the credit is the lesser of one-half of the amount contributed, or $100.
  • For individuals filing a joint return, the credit is the lesser of one-half of the amount contributed, or $200.

Note: Tuition paid to a college or university is not a contribution, and does not qualify for this credit.

Get Schedule CC-40 for complete details.

Credit for Taxes Paid to Other States

Indiana residents must report all income that is reported for federal income tax purposes on their Indiana individual income tax return. This includes income from sources outside Indiana. Likewise, nonresidents who receive income from Indiana generally will owe tax to Indiana on the part of their income that is from or connected with Indiana sources.

When this happens, individuals may be subject to individual income tax by both their state of residence and the state where the income comes from. Indiana has entered into agreements with several states to eliminate the requirement of paying tax to two states on the same income. Tax treatment of out-of-state income depends upon the types of income and the state from which the income is derived.

Note: Indiana only allows credits for individual income tax paid to other states or localities. Other taxes such as property taxes, corporate income taxes, and unincorporated business taxes are not allowed as a basis for claiming such credits.

See Information Bulletin #28 and the IT-40 instruction booklet (IT-40PNR instruction booklet) for details on how to figure and claim this credit.

Indiana State and County Tax Withholding Credits

Claim the Indiana state and Indiana county tax withholding amounts as credits when you file your Indiana income tax return (Forms IT-40, IT-40PNR, IT-40EZ, IT-40RNR or IT-40X).

Indiana State Tax On Gambling Winnings

Indiana withholding amounts may be found on any of the following forms:

  • W-2: Wage and Tax Statement
  • W-2G: Certain Gambling Winnings
  • 1099-G: Certain Government Payments
  • 1099-R: Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, etc.
  • 1099-MISC: Miscellaneous Income
  • WH-18: Miscellaneous Withholding Tax Statement for Nonresidents (Indiana form)
  • WH-4852: Indiana Substitute for Form W-2 or Form 1099-R (Indiana form)

Do not claim other state's or non-Indiana locality withholding amounts on your Indiana income tax return. You'll need to contact those states/localities for instructions on how to claim those credits.

State

Indiana's Earned Income Credit

You may be eligible for Indiana’s earned income credit if you have claimed an earned income credit on your federal tax return. Get Schedule IN-EIC and review the detailed instructions beginning on page 27 of the IT-40 instruction booklet (page 31 of the IT-40PNR instruction booklet).

Are Gambling Winnings Taxable In Nevada

Unified Tax Credit for the Elderly

You may be able to claim the unified tax credit for the elderly if you or your spouse meet all the following requirements:

  • You and/or your spouse must have been age 65 or older by the end of the tax year;
  • You must file a joint return if you were married and living together at any time during the year;
  • Your federal adjusted gross income must be less than $10,000;
  • You must claim the credit by June 30 of the tax year;
  • You must have been a resident of Indiana for six months or more during the tax year; and
  • You must not have been in prison for 180 days or more during the tax year.

Paying Taxes On Gambling Winning

The credit ranges from $40 to $140, depending on your age, marital status and income, and must be claimed no later than June 30 following the close of the tax year.

Tax Rate On Gambling Winnings

Check out Section VI: Credits Available to the Elderly in Information Bulletin #26 for more information.