Ohio Gambling Tax Calculator: How Your Betting Winnings Will Be Taxed + How to File in Ohio
Sportsbooks online in Ohio are legal and went live on January 1, 2023. Whether your preference is in-person betting or mobile betting, the tax information when it comes to your winnings is critical to understand.
The goal of course is to win, and have fun while doing so. But unfortunately, there are tax liabilities that come with the gambling winnings from apps like ESPN BET Ohio. We’re going to answer some specific Ohio gambling tax questions, as well as some questions on federal taxes.
Ohio Gambling Tax Calculator
There’s no one specific gambling tax rate in Ohio. It is treated differently than your regular income, but the rate you ultimately pay depends on your overall taxable income. You will find it helpful to hold onto any statements you receive from sportsbooks such as BetMGM Ohio, in case you have losses that you can declare for your Federal taxes.
Are Gambling Winnings Taxable in Ohio?
Yes, gambling winnings are taxable on both the federal level and in the state of Ohio whether they are cash winnings or some other payment in kind. In Ohio it is treated as “Other Income” on Form 1040, Schedule 1 . Winnings are taxed at the same rates as regular income.
What are the Gambling Tax Rates in Ohio?
Ohio gambling taxes are on a graduated scale based on your total ordinary income. Gambling winnings from Ohio sports betting apps will count as “Other Income” but are taxed as part of your total. The parameters change over time, but as of tax year 2022 there were 6 graduated levels. Here are the rates at each level.
Remember these numbers refer to your total income, not your gambling winnings The casino or sportsbook operator is obligated to withhold 4% of your winnings, so depending on specifics the withholding will often exceed your tax liability.
How to Claim and Report Ohio Gambling Winnings for Taxes
A payer, such as the casino operator or sportsbook or the Ohio Lottery Commission, is obligated to issue you Federal Form W-2G. This will itemize your gambling income. On your federal form, you submit this as other income on Form 1040, Schedule 1. As for state taxes in Ohio, you report gambling winnings on Form IT 1040, but only winnings accrued in Ohio. In addition, you submit any Ohio state tax withholdings on gambling winnings on this same form.
It’s possible the IRS could ask you to substantiate wins and losses. If that happens, the following documentation will be helpful:
- Form(s) W-2G
- Wagering tickets with dates and location. The names of people who were with gambling with you at the time. Amounts won and lost.
- Canceled checks and casino credit records
- Relevant bank statements
Will I Be Taxed on Ohio Betting Promotions?
You will not be taxed on simply receiving or claiming Ohio sports betting promos. If you win money from the promotional bonuses, however, the winnings will be taxed.
What to Do if You Do Not Receive a W-2G Form in Ohio?
It is important to note that not only are you obligated to submit the w-2G forms, but it is in your best interests to do so. Remember that money was withheld from your winnings to begin with. If you do not receive all of the W-2G forms, you can and should contact the operators that owe you the info and then make sure you get and submit them. For example, if you win a big bet at Caesars Sportsbook Ohio, you should make sure you get the forms you need, and contact them if not.
It is worth noting that officially state licensed online sportsbooks and casinos are all set up to ensure that you get the right documentation correctly filled out. If you use illegal offshore casinos you are creating a tax headache that is not worth it. Bring your play back to the legal Ohio regulated sportsbooks and you will be much more secure.
Can I Deduct Gambling Losses in Ohio?
You can deduct gambling losses on your federal taxes but you cannot deduct losses on your state taxes in Ohio. As per the IRS “You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040) and kept a record of your winnings and losses. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. Claim your gambling losses up to the amount of winnings, as "Other Itemized Deductions."
And even on federal taxes, there are caveats. You are not eligible if you report using the standard deduction. If you are still eligible, its important that you keep a diary of your wins and losses. You must provide receipts, statements or some other official record to verify the amounts of your wins and losses. If you happen to lose money with a brand like FanDuel Ohio, make sure you keep track of things if you plan to deduct.
Ohio Lottery Taxes
Ohio Lottery taxes are virtually identical to gambling taxes. If you win more than $600, Ohio will withhold taxes of 4% while federal regulations will withhold taxes somewhere between 24%-28%. The rates vary depending on specifics and your ultimate liability depends on your overall income.
Ohio Casino Taxes
Although online casinos in Ohio are not legal, there are brick and mortar locations around the state. If you win $5,000 or more at any casino in Ohio, they will automatically withhold 24% of your winnings. This covers the applicable federal taxes. You will be provided with a Form W2-G, which is also known as the "Certain Gambling Winnings" form. The form will display the total amount you won, the amount withheld and your information, as well as other small details. The casino will ask you for your tax ID number or your social security number. The casino will not withhold any money on smaller wins; however, this does not mean you won't owe gambling taxes in Ohio. Rather you will be required to report them to the IRS on your own.
How Are Group Lottery Wins Taxed in Ohio
Group lottery wins on the individual level are taxed at the same rates as gambling income and individual lottery wins. The process is different however. You fill out Form 5754 and upon receipt, Ohio Lottery will then provide each member of the group with a W-2G form.
Taxes on Multi-State Lottery Wins
There are multi-state lotteries galore available in Ohio such as PowerBall, Lucky for Life, Pick 4, Pick 4 and Pick 5. If you hold a winning ticket of at least $600, it counts the same as if you hit on an in-state lottery. Its subject to the same withholding as if it was Ohio-based, you will receive the same W-2G form and your ultimate tax rate is based on your overall income as above.
What Happens If I Don’t Report My Gambling Winnings?
It's important to know that you should report your gambling earnings, same as you would report all taxable income. It is also in your best financial interests. That's even if it is some sort of non-cash prize from DraftKings Ohio or other sportsbooks, that nevertheless has a real value.
The casino, sportsbook or lottery provider has already withheld some of your winnings, so reporting it properly sets you up for a refund or effective credit vs other income. You don't want to be paying taxes that you have already taken care of!
If you don’t report, you may get hit with higher withholding levels on the Federal level. The federal income tax withholding rate may go up from 24-25% to 28%. Finally, if you remain uncertain do consult a professional advisor. Gambling taxes are not something you should risk getting wrong.
Ohio Gambling Taxes FAQs
You must be at least 21 to legally bet on sports in Ohio.
Yes, sports betting is legal in Ohio. You can place a wager in-person, online from a desktop and with a mobile app. You must be at least 21 years of age and within the state lines.
Yes. In Ohio, the tax rate for the operators is 10% of the gross revenue. For the bettors, gambling winnings are taxable income like any other. You're required to keep track of and report any winnings on your tax return, and if you win at least 300 times what you bet, and that amount is over $600, the gambling house will have to report it too.
Author
Adam Warner is the author of "Options Volatility Trading: Strategies for Profiting from Market Swings" former financial writer for Schaeffers Research, and freelance writer for Minyanville.com and StreetInsight.com. Previously Adam was a Market Maker on the American Stock Exchange and a graduate of Johns Hopkins University.
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