Gambling winnings tax in Virginia

Virginia allows gambling losses only if you itemize on your federal return. Take the standard deduction and it taxes your gross winnings. Whether only 90 percent of your losses count from 2026 is not settled.

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

In short

If your gambling losses make you itemize on your federal return, you must itemize for Virginia too. You give up the Virginia standard deduction, even when itemizing gives you less.9
Large winnings can reduce your itemized deduction under Virginia’s overall limit on itemized deductions.10
The Virginia Lottery withholds 4.0 percent of the whole prize on prizes above $5,000.

How Virginia treats gambling losses

8, 9

Virginia allows the deduction only to filers who itemize on the federal return. Take the federal standard deduction and the offset disappears, so gross winnings are taxed even in a year you finished down.

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

Two examples, worked at 2026 Virginia 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
Virginia: $687
Total: $4,283

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. Virginia allows the loss deduction only to filers who itemize federally, which you do. Your Virginia income, after Virginia's standard deduction or your itemized deductions, whichever your federal return takes, and your $930 personal exemption, goes from $50,320 without the win to $62,270 with it. The extra $11,950 is taxed at 5.75 percent, which comes to $687.

A winning year

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

Federal: $10,350
Virginia: $2,875
Total: $13,225

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. Virginia allows the loss deduction only to filers who itemize federally, and you do not. Your Virginia income, after Virginia's standard deduction or your itemized deductions, whichever your federal return takes, and your $930 personal exemption, goes from $50,320 without the win to $100,320 with it. The extra $50,000 is taxed at 5.75 percent, which comes to $2,875.

Virginia income tax rates, 2026

Taxable income	Rate
$0 to $3,000	2 percent
$3,000 to $5,000	3 percent
$5,000 to $17,000	5 percent
$17,000 and above	5.75 percent

The calculator also applies what this table leaves out: no tax at all at low income and a personal exemption of $930 a person, taken before the table.

Withholding on winnings

Virginia withholds 4 percent. The rule in the state's sources:

the state lottery: above $5,000 (on the whole prize, and the regulation requires withholding for every nonresident winner).

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 Virginia

5, 10, 15

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).

Virginia has not said whether the federal 90 percent limit applies. Its own law measures the state deduction by the federal figure, so the limit can arrive without Virginia doing anything. Virginia follows the federal code as it stood on 2025-12-31.

Our estimate assumes the limit applies, which gives the higher tax. The calculator also shows the tax if the limit does not apply. We would rather tell you the number could be lower than let you plan around one that turns out to be too low.

If you do not live in Virginia

Virginia source income includes Virginia Lottery prizes and gambling winnings from wagers placed or paid at a location in Virginia. Withholding applies to all nonresident lottery winners.

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

More about Virginia

Itemizing or the standard deduction

Virginia makes you use the same method as your federal return. If you take the federal standard deduction, you must take the Virginia standard deduction. If you itemize federally, you must itemize for Virginia even when that gives you less. So if your gambling losses make you itemize on your federal return, you give up the Virginia standard deduction.9

The Virginia standard deduction depends on the year. Va. Code 58.1-322.03(1)(b) raises it for 2027 through 2029, and it goes back down from 2030:

Tax year	Single	Joint
2025 and 2026	$8,750	$17,500
2027	$9,200	$18,400
2028 and 2029	$9,300	$18,600
From 2030	$3,000	$6,000

Virginia keeps the federal overall limit on itemized deductions as it was before the 2025 federal law, and it does not use the new one. Large winnings can reduce your deduction under the Virginia limit.10

Tax rates

Virginia’s rate brackets have not changed since tax year 1990, and they are not indexed. They are the same for every filing status.7

Withholding

The Virginia Lottery withholds 4.0 percent on prizes above $5,000, and it withholds from the whole prize. That rate is for the Lottery only. Virginia publishes no withholding rate for casino or sports betting.

If you file jointly

If you file jointly and both spouses have income, you can take the Spouse Tax Adjustment of up to $259 (Form 760 line 17).

Small Virginia Lottery prizes

Virginia Lottery prizes under $600 are subtracted from your Virginia taxable income.

About this estimate

If you are 65 or older, the calculator takes off Virginia’s extra $800 exemption and the age deduction of $12,000 for each person 65 or older. The deduction falls $1 for each $1 of federal AGI, less taxable Social Security, over $50,000, or $75,000 married, so a win in that range can cost up to twice the usual rate. On a separate return Virginia counts both spouses’ income, which the calculator cannot see.

The calculator does not include Virginia’s overall limit on itemized deductions.

The calculator does not include the Spouse Tax Adjustment, because it needs each spouse’s income. Unless each spouse’s Virginia AGI less their $930 exemption is over $17,000 and joint taxable income is over $34,000, with and without the win, the real cost of the win can differ by up to $259.

Sources

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

1. Va. Code 58.1-322.03(2)(b): an additional personal exemption of $800 for each aged taxpayer as defined under IRC 63(f), and (5): the age deduction (checked 2026-10-12)
2. Va. Code 58.1-322.03(5)(b): $12,000 for a person who has attained 65, reduced $1 for every $1 of adjusted federal adjusted gross income over $50,000 single or $75,000 married (checked 2026-10-12)
3. 2025 Form 760 instructions, Age Deduction Worksheet: $50,000 for filing status 1, $75,000 for all married taxpayers, line 12 multiplies by the number claiming (checked 2026-10-12)
4. 2025 Form 760 instructions: the Virginia standard deduction, $8,750 or $17,500, and the lock to the federal choice both ways (checked 2026-09-25)
5. Va. Code 58.1-322.03(1)(a), the amount allowable for itemized deductions for federal income tax purposes (checked 2026-09-25)
6. Va. Code 58.1-322.03(2)(a), a deduction of $930 for each personal exemption (checked 2026-09-25)
7. Va. Code 58.1-320, imposition of tax and rate table (checked 2026-09-11)
8. Ruling of the Tax Commissioner 24-20, wagering losses allowable only to the extent of winnings (checked 2026-09-11)
9. Form 760 instructions (2025), the rule that ties state itemizing to federal itemizing, and Virginia source income (checked 2026-09-15)
10. Va. Code 58.1-301, fixed conformity to the Code as it existed December 31, 2025 (checked 2026-09-11)
11. 23VAC10-140-282, withholding on Virginia Lottery prizes (checked 2026-09-11)
12. Va. Code 58.1-321 and 58.1-339.8, filing threshold and credit for low-income individuals (checked 2026-09-25)
13. Va. Code 58.1-339.8, credit for low-income individuals at or below the poverty guideline (checked 2026-09-24)
14. HHS poverty guidelines by year: 2025 $15,650 for one and $5,500 for each further person, 2026 $15,960 and $5,680 (checked 2026-10-11)

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

15. 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.