Gambling winnings tax in Pennsylvania

Pennsylvania lets you deduct gambling losses up to the amount you won and no further.

Checked against Pennsylvania’s own sources on 2026-09-25.

In short

You subtract the cost of your wagers from your gambling and lottery winnings on Schedule T. Pennsylvania has no standard deduction and no itemized deductions.9, 4
Only the cost of tickets, bets and wagers counts. You cannot subtract travel, meals, programs or tip sheets.4
Local Earned Income Tax does not apply to gambling or lottery winnings.

How Pennsylvania treats gambling losses

Pennsylvania does not tie the deduction to your federal itemizing choice, so a filer who takes the federal standard deduction gets the same offset as one who itemizes.

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

Two examples, worked at 2026 Pennsylvania 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
Pennsylvania: $0
Total: $3,596

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. Pennsylvania lets you deduct losses up to the amount you won and no further, so none of it is taxed by Pennsylvania.

A winning year

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

Federal: $10,350
Pennsylvania: $1,228
Total: $11,578

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. Pennsylvania lets you deduct losses up to the amount you won and no further, so $40,000 is taxed at 3.07 percent, which comes to $1,228.

Pennsylvania income tax rates, 2026

2, 3

Taxable income	Rate
$0 and above	3.07 percent

The calculator also applies what this table leaves out: a Tax Forgiveness credit that takes a share off the tax and shrinks as income rises.

Withholding on winnings

Pennsylvania withholds 3.07 percent. The rule in the state's sources:

the state lottery: above $5,000 (measured on the whole prize, before any split among winners).

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.

The federal 90 percent loss limit in Pennsylvania

5, 6, 12

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).

Pennsylvania does not apply the federal 90 percent limit, so a loss deduction on your state return is not cut to 90 percent.

Pennsylvania does not start from the federal code. The paragraph above says what this means for the federal 90 percent limit.

If you do not live in Pennsylvania

Pennsylvania taxes nonresidents on Pennsylvania source gambling and lottery winnings, other than noncash Pennsylvania Lottery prizes. The Department of Revenue page for nonresidents and the Personal Income Tax Guide disagree on cash lottery prizes. The Personal Income Tax Guide controls.

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

More about Pennsylvania

Subtracting what your wagers cost

Pennsylvania has no standard deduction and no itemized deductions. You subtract the cost of your wagers from your gambling and lottery winnings on Schedule T.9, 4

You can subtract only the cost of tickets, bets and wagers. You cannot subtract travel, meals, programs or tip sheets.4

Each spouse subtracts wager costs only from their own winnings. You cannot use your spouse’s wager costs.4

On your 2025 Schedule T, you cannot include the cost of Pennsylvania Lottery tickets that you bought before January 1, 2025.4

Local tax

Local Earned Income Tax does not apply to gambling or lottery winnings. The taxpayer return from the Pennsylvania Department of Community and Economic Development (DCED) lists lottery winnings as non-taxable income.

Sources

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

1. 2025 PA-1000 booklet: the Property Tax/Rent Rebate tiers to $48,110, and gambling and lottery winnings in income (checked 2026-10-12)
2. PA DOR personal income tax rates (checked 2026-09-11)
3. Form REV-413I (2026), estimated tax instructions confirming 3.07 percent for 2026 (checked 2026-09-11)
4. PA-40 Schedule T (2025), gambling and lottery winnings (checked 2026-09-11)
5. PA DOR notice on the Tax Cuts and Jobs Act and the One Big Beautiful Bill Act (checked 2026-09-11)
6. 72 P.S. 7303, classes of income subject to the personal income tax (checked 2026-09-11)
7. PA DOR Act 84 of 2016 lottery winnings questions and answers, withholding on Pennsylvania Lottery prizes greater than $5,000 (checked 2026-09-11)
8. PA Personal Income Tax Guide, gambling and lottery winnings (checked 2026-09-11)
9. PA Personal Income Tax Guide, deductions and credits: the federal standard deduction and itemized deductions are disallowed (checked 2026-10-06)
10. 72 P.S. 7304, special tax provisions for poverty (checked 2026-09-25)
11. 2025 PA-40 Schedule SP, Tax Forgiveness Credit and Eligibility Income Tables 1 and 2 (checked 2026-09-25)

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

12. 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)

We could not confirm these from an official source: whether any city or county tax applies.