Gambling winnings tax in Indiana

Indiana taxes your gross gambling winnings and allows no deduction for losses, so a losing year can still produce a state tax bill.

Checked against Indiana’s own sources on 2026-09-11.

In short

The Indiana rate goes down to 2.95 percent for 2026, from 3.00 percent for 2025.3, 4, 2
Departmental Notice 16 has a casino withhold only the state rate from your winnings. It names no county tax.3

How Indiana treats gambling losses

6, 7

Indiana does not let a casual gambler offset winnings with losses at all, so how you file federally makes no difference to the state figure.

The two examples below are the same numbers the calculator uses, worked at Indiana rates.

Two examples, worked at 2026 Indiana rates

A single filer with $60,000 of other income who takes the standard deduction on everything except gambling losses.

A losing year

You win $50,000 and lose $52,000, so you finish down $2,000.

Federal: $3,596
Indiana: $1,475
Total: $5,071

You finished the year down and still owe tax.

Federally you itemize, so your losses offset your winnings, but the 2026 rule caps that deduction at 90 percent and leaves $3,200 taxable. Indiana starts from your federal income and allows no deduction for gambling losses, so the full $50,000 is taxed at 2.95 percent, which comes to $1,475.

A winning year

You win $50,000 and lose $10,000, so you finish up $40,000.

Federal: $10,350
Indiana: $1,475
Total: $11,825

Federally you take the $16,100 standard deduction, which is worth more than itemizing, so your gambling losses do not reduce your federal tax at all. Indiana starts from your federal income and allows no deduction for gambling losses, so the full $50,000 is taxed at 2.95 percent, which comes to $1,475.

Indiana income tax rates, 2026

2, 3, 5

Taxable income	Rate
$0 and above	2.95 percent

The calculator also applies what this table leaves out: the personal exemption, taken before the table.

Withholding on winnings

Indiana withholds 2.95 percent. The rule in the state's sources:

slot machines, keno and bingo: $2,000 or more (slot machines and keno only, at a licensed casino or racino, measured on the slot payout before the wager comes off and on keno winnings after it).

These sources give no rule for other kinds of bet, so do not assume tax was withheld on one.

Withholding is a credit against the bill, not the bill itself. It does not settle what you owe.

Local tax

All 92 Indiana counties levy an income tax, from 0.50 percent in Porter to 3.00 percent in Randolph for 2026. A Randolph County resident pays 5.95 percent all in. County tax is keyed to residence on January 1 and applies to gross winnings with no offset for losses.

The federal 90 percent loss limit in Indiana

8, 9

From tax year 2026 the federal deduction for gambling losses is cut to 90 percent of what you lost, and never more than what you won. Public Law 119-21 did it, at section 70114(a), by rewriting 26 U.S.C. 165(d).

Indiana allows no loss deduction at all, so the federal limit changes your federal bill and not your Indiana bill.

Indiana follows the federal code as it stood on 2026-01-01. The paragraph above says what this means for the federal 90 percent limit.

If you do not live in Indiana

A nonresident files IT-40PNR. The reciprocity agreements with Kentucky, Michigan, Ohio, Pennsylvania and Wisconsin do not cover gambling winnings.

The calculator works the bill for somebody who lives in Indiana. It does not apportion income between states, so a nonresident return is not what the figure above describes.

More about Indiana

The state rate

The Indiana rate by tax year:3, 4, 2

Tax year	Rate
2025	3.00 percent
2026	2.95 percent
2027 and later	2.90 percent

County tax

Six Indiana counties changed their county tax rate on January 1, 2026.

Withholding

Departmental Notice 16 has the casino withhold only the state rate. It names no county tax.3

For 2025, Indiana withholding started at $1,200 for slot play and $1,500 for keno.3

Old Hoosier Lottery annuities

The Hoosier Lottery annuity deduction applies only to lotteries held before July 1, 2002. It does not apply to casino winnings or to out-of-state lottery prizes.7

About this estimate

The estimate takes off your $1,000 personal exemption, or $2,000 on a joint return. It takes off $1,000 more for each person 65 or older, and $500 more for each while federal AGI is under $40,000, or $20,000 on a separate return. A win that takes federal AGI to the line loses the $500. It leaves out the exemptions for dependents, for a spouse with no income on a separate return and for blindness, and the unified tax credit for the elderly, so for those filers the figure can differ. It does not work out county tax.

Sources

Every figure above traces to a primary source: a statute, an administrative code, a state agency page, or official form instructions.

1. Form IT-40 instructions, Schedule 3: an additional $1,000 exemption for each person 65 or older, and $500 more below federal AGI of $40,000 (checked 2026-10-12)
2. Indiana DOR rates, fees and penalties, 2026 individual rate (checked 2026-09-11)
3. Departmental Notice 16 (December 2025), withholding on winnings and the annual rate schedule, with the 2025 thresholds (checked 2026-09-11)
4. Departmental Notice 16 (March 2026), withholding at 2.95 percent for 2026 on slot and keno winnings of $2,000 or more, after IC 6-3-4-8.2 was amended (checked 2026-10-06)
5. Departmental Notice 1, county tax rates effective January 1, 2026 (checked 2026-09-11)
6. Indiana DOR individual FAQ, no deduction for gambling losses (checked 2026-09-11)
7. Form IT-40 instructions, federal AGI starting point, reciprocity carve-out and the Schedule 3 exemptions (checked 2026-10-11)
8. Indiana DOR legislative synopsis 2026, SEA 243 conformity update (checked 2026-09-11)

The federal rule, for the parts of this page that rest on it

9. Public Law 119-21 section 70114(a), which rewrote 26 U.S.C. 165(d) on wagering losses from tax year 2026 and sets out its text (checked 2026-10-18)