Gambling winnings tax in Washington

Washington has no state income tax, so it does not tax your gambling winnings as income.

Checked against Washington’s own sources on 2026-10-05.

In short

Washington has enacted an income tax of 9.90 percent that starts on January 1, 2028. Tax years 2026 and 2027 are not affected.2

How Washington treats gambling losses

Washington has no income tax, so there is no Washington return for your losses to change. They still matter on your federal return, and can matter on another state’s return if you won there.

The two examples below are the same numbers the calculator uses. With no Washington income tax, only the federal figure changes.

Two examples, worked at 2026 federal 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
Washington: $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. Washington has no income tax, so none of this is taxed at the state level.

A winning year

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

Federal: $10,350
Washington: $0
Total: $10,350

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. Washington has no income tax, so none of this is taxed at the state level.

Withholding on winnings

1, 2, 4, 5

Washington has no income tax, so no state income tax is withheld from your winnings. Any income tax withheld on a win here is federal.

Local tax

6, 7, 8

No Washington county or city may tax net income, and state law bars local taxes on any form of personal income. Cities and counties may tax gambling businesses, for example up to 5 percent of bingo and raffle receipts less prizes and up to 20 percent of social card game revenue. The business pays that tax, not you.

If you do not live in Washington

Washington has no income tax for 2026 or 2027, so it does not tax a visitor’s winnings as income in those years. If your home state taxes income, its own rules decide how it taxes the win, and there is no Washington income tax for it to credit.

More about Washington

The income tax that starts in 2028

Washington has enacted an income tax of 9.90 percent that starts on January 1, 2028 (ESSB 6346, chapter 238, Laws of 2026). Each person gets a $1,000,000 standard deduction, and spouses share one $1,000,000 deduction whether they file jointly or separately. The deduction is adjusted for inflation each year. Tax years 2026 and 2027 are not affected.2

Under that tax, from 2028 you can deduct 90 percent of your Washington wagering losses, but no more than your Washington wagering income. You cannot carry unused losses forward or back.2

Under that tax, if you do not live in Washington, income from wagering transactions is assigned to Washington (section 401(2)(g)).2

The capital gains tax

Washington’s capital gains tax does not apply to gambling winnings. It applies only to the sale or exchange of long-term capital assets, and a wager is not one.3

Washington’s Lottery prizes

Before it pays a prize of more than $600, Washington’s Lottery takes out any debt you owe to a state agency or local government.9

Sources

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

1. Washington Department of Revenue, income tax (checked 2026-09-15)
2. ESSB 6346, ch. 238, Laws of 2026 (session law), secs. 201, 312, 314, 401 (checked 2026-09-12)
3. RCW 82.87.040, tax imposed on long-term capital assets (checked 2026-09-12)
4. Washington State Constitution article VII section 1, uniformity clause (Code Reviser compiled text) (checked 2026-09-12)
5. Washington's Lottery, claim your prize, federal withholding only (checked 2026-09-12)
6. RCW 1.90.100, personal income tax prohibition (checked 2026-10-05)
7. RCW 36.65.030, no local tax on net income (checked 2026-10-05)
8. RCW 9.46.110, local taxes on gambling activities (checked 2026-10-05)
9. RCW 67.70.255, lottery prizes set off against debts (checked 2026-10-05)