Taxes are always complicated. So, to help you understand what you owe on your newly-placed bets, we’re answering some key questions. Specifically, about how much Ohio gambling tax you’ll owe on betting wins (and how much you might be able to deduct).
Player Taxes on Gambling Winnings in Ohio
First and foremost, don’t try and cheat the government out of their piece of the pie. You will get caught. If not immediately. But they will catch up to you. So, if you are lucky to collect winnings at a casino or sportsbook (or really anywhere), report 100% of it to the IRS.
These winnings are considered “other income” and should be filled in on Line 7a on the Schedule A, Form 1040 tax return document. If you need to figure out your winnings on a specific wager, use the net gain.
For example, if you throw down $200 on the Cavs to win and take home $500, your net gain is $300, not $500. Don’t sell yourself short by claiming $500 as a win.
Congrats, your winnings have been reported. But if you are gambling, the chances are you have an equal amount of losses. If you don’t, please tell us your secrets!
In addition to the winnings you are keeping track of, make sure to also keep accurate accounts of your losses. Why would you want to be reminded of these? Because you are also able to deduct them on your Ohio gambling taxes. If you don’t take the time to itemize and take the standard deduction, you won’t be able to deduct those losses.
Your gambling losses are only deductible up to the amount of your gambling winnings. That means that you can use your losses to essentially “wipe out” gambling income but you are not able to show a gambling loss. So, you cannot deduct more than you won.
We can’t stress enough how important it is to maintain accurate records of your Ohio gambling wins and losses throughout the year. Keep a physical or digital diary that marks the date, place, and amount of your wins and losses and your wins. Save all receipts from casinos or sportsbooks and any checks or credit slips.
Are Sportsbook Winnings Withheld in Ohio?
According to Ohio state law, sportsbooks and casinos are legally required to withhold 4% of your winnings to be paid in state income tax on a quarterly basis. This will be reported as deducted and withheld on the Form W-2G (Titled: “Certain Gambling Winnings”) that the casino operator will provide to you.
In addition, your winnings will be subject to local taxes if you live in one of the following:
- Cincinnati: 2.1% tax for residents and non-residents
- Toledo: 2.25% for residents and non-residents. A $2500 exemption is claimed by filing a Toledo City tax return.
- Cleveland: 2% for residents only
- Columbus: 2.5% for residents and non-residents
Remember that even if the institution that you placed a bet with fails to provide you with a Form W-2G, you are still expected to report the winnings and losses to the IRS.
Let’s Dive Deeper…
Sportsbooks usually withhold 25% of your winnings. They may hold up to 28% if they don’t have your tax information (your SSN). Your SSN will also be needed when registering for a new online sportsbook account in Ohio. This is for verification purposes only.
But the thing about taxes is that they are scaled to match your income. Just one of the many ways the “man” makes it difficult to get ahead in this world, right? No matter how you fare at your favorite casino or sportsbook, the taxman cometh. How hard he hits you will depend on your total income from the calendar year.
Yes, Ohio gambling tax issues can be confusing.
The state of Ohio has six tax brackets, outlined in the table below.
Ohio Tax Brackets
|$ 22,151 – $ 44,250||$ 316.18 plus 2.850% of the amount in excess of $ 22,150|
|$ 44,250 – $ 88,450||$ 946.03 plus 3.326% of the amount in excess of $ 44,250|
|$ 88,450 – $ 110,650||$ 2,416.12 plus 3.802% of the amount in excess of $ 88,450|
|$ 110,650 – $221,300||$ 3,260.16 plus 4.413% of the amount in excess of $110,650|
|more than $221,300||$ 8,143.14 plus 4.797% of the amount in excess of $221,300|
Remember that winnings are part of your income. If you think you are in the second tax bracket because your employer pays you 40k, but you won 10k betting on sports, you are actually in the third bracket.
Where Do My Sports Betting Taxes Go in Ohio?
Ohio is collecting a 10% tax rate on sportsbooks in the state. Then, 98% of the taxes collected on sport-gaming tax revenue is being funnelled into a fund that aims to support public and private schools. Money will also be spent on funding sports and extracurricular programs for those schools.
How, exactly, the money will ultimately be distributed remains to be seen. All we know is that Ohio gambling tax is going to benefit the Buckeye States in many ways outwith the gambling sector itself!