Tennessee Gambling Winnings Tax Calculator 2024: How Will You Be Taxed?

Fact Checked by Blake Weishaar

In Tennessee, any gambling winnings are considered taxable income. Whether you won money from sports betting in Tennessee, casino games, or a lottery prize, it is of critical importance that you claim your gambling income so that you pay taxes correctly.

Tax season is never fun. That's why we created this Tennessee tax calculator, to make your life easier when Uncle Sam comes knockin'. So anytime you choose to snag one of the many Tennessee sports betting promos available and win big, you'll want to keep this page handy. Keep reading to find out about taxable income in Tennessee, how to deduct gambling losses, and more.

Bonus Bets Expire in 7 Days. One New Customer Offer Only. Must be 21+ to participate & present in TN. Gambling Problem? Call or Text the Tennessee REDLINE: 800-889-9789. Visit BetMGM.com for Terms & Conditions. US promotional offers not available in NY, NV, or Puerto Rico.

Tennessee Gambling Tax Calculator

The Tennessee tax calculator is your best friend when it comes to figuring out how much tax you owe for your gambling winnings. Use the tool below to find out how much you could owe on your total gambling winnings this year.

What Are Tennessee 2024 Gambling Tax Rates?

There is no state income tax rate for gambling winnings in Tennesee. Taxes on gambling winnings in Tennesee are only subject to being taxed at the federal level. Gambling winnings that total $5,000 or more over the course of the year are taxed 24% by the federal government. Remember, the $5,000 total is cumulative throughout the entire year, so even if you earn just $500, you will have to pay federal taxes on these winnings. This federal tax rate applies to any and all forms of gambling winnings.

Even if you earn below $5,000, it is still necessary to report all gambling winnings. The way you report your winnings will depend on the amount that you earn. In certain circumstances, the gambling organization will issue a Form W-2G. We'll go over this form in more depth later in this article. If these circumstances do not apply, you will need to include the value of any cash or other prizes in the "Other Income" section of Form 1040.

Are Gambling Winnings Taxable in Tennessee?

In Tennessee, all gambling winnings are considered taxable income. It is important that you keep a detailed record of any earnings throughout the year as this will make reporting gambling winnings easier later on. Winnings from poker tournaments, slot machines, sports betting, and the Tennessee State Lottery are just some examples of gambling income that is taxable.

Luckily, reporting your gambling income to the IRS isn't as complicated as it might seem initially. The way you report will ultimately depend on the amount you earn throughout the year. In certain situations, you will receive a W-2 G tax form. If you are not eligible for this form, all you have to do to report gambling winnings is include the value of cash and prize winnings in the "Other Income" section of Form 1040 federal tax return.

Could I Be Taxed For Claiming Tennessee Betting Promotions?

Claiming a promotion on any of the available Tennessee sports betting apps doesn't automatically mean you'll be taxed. While the bonus bets claimed through a promo isn't considered revenue for you, the money you win in return of using those bonus bets can be, depending on how much you actually win. 

How much money can you win gambling in Tennessee without paying taxes?

There is one important federal tax threshold to keep in mind when thinking about if you will have to pay taxes on a gambling win or not: $5,000. If you earn more than $5,000 in gambling earnings in a tax year, this income will be subject to a 24% gambling winnings tax. The gambling tax applies to lottery winnings, slot machine winnings, earnings from casino table games, and sports betting wins. When calculating the amount that is owed, it is necessary to consider the total value of both cash and non-cash prizes.

There are technically no state income taxes on gambling in Tennessee, with a slight exception. If you use earnings from the lottery or sports betting to produce interest, you may be subject to paying 1% as per the Hall Income Tax.

Explaining a W-2 G Form in Tennessee

The Form W-2G is the most common way to report your gambling taxable income in Tennesee. There are certain eligibility criteria that you will have to meet in order to receive this form. It is the responsibility of the gambling institution to send you this form for you to fill out. If you do not receive a form when you believe you should have, you should contact your gambling organization. The eligibility criteria are as follows:

  • $600 or more on a horse race or other similar event, in the event that the earnings are 300 times the amount of a wager or more.
  • $1,200 or more from bingo or slot machines.
  • $1,500 or more from keno.
  • $5,000 or more from poker.

Nothing needs to be filled out when you receive the form. In fact, the form should not be sent to the IRS when you file your taxes either. Instead, if you receive a Form W-2G, make sure to keep a copy safe in your records for the next five years at least.

Whether you receive a W-2G form or not, it is still necessary for you to report your gambling income. In this case, you will enter the total value amount of cash and non-cash earnings using Form 1040. The amount should be entered in the "Other Income" section of the form. If you did receive the W-2G Form, you will need to transfer some information from this form to the Form 1040.

Can I Deduct My Gambling Losses On My Taxes In Tennessee?

The good news is that it is possible to deduct gambling losses in Tennessee. All residents of the state are entitled to deduct losses up to the amount of total winnings in the year. In other words, if you won $4,000 from gambling this tax year, you can deduct up to $4,000 in gambling losses. Remember, only direct gambling losses are deductible. It is not possible to deduct other expenses incurred due to gambling.

Itemized deductions must be provided when claiming gambling losses. This is another reason why it is a good idea to always keep a close record of your gambling activity from the start of the year. By doing so, it will be easier to keep track of losses and provide each itemized deduction. You should hold on to any form or relevant paperwork for at least five years.

Must be 21+ to participate. T&Cs Apply. Gambling Problem? Call or Text 1-800-GAMBLER

Tennessee Lottery Taxes

Tennessee lottery taxes are subject to the same federal taxes as other forms of gambling. Whether earnings came from Mega Millions or Keno winnings, the same rates apply. Any Tennessee residents that earn more than $5,000 in gambling winnings will be taxed 24% by the federal government. Remember, gambling winnings refer to earnings from all forms of gambling, and for tax purposes means the total income from any gambling winnings combined.

How Are Group Lottery Wins Taxed In Tennessee?

Group lottery winnings refer to situations where you and friends or family pool resources together to purchase a lottery ticket and end up winnings. These winnings must also be reported. The IRS provides a special form for this situation to make things less complicated. The Form 5754 is received from the gambling establishment and should be filled out accurately before returning it to whichever establishment the winnings came from. As is the case with the Form W-2G, this form is not included in your federal tax return. You should, however, hold on to it for your own records.

Taxes on Multistate Lottery Wins

Multi-state lottery wins are subject to the same taxes as other forms of the lottery. If you aren't familiar with the term, Multi-state lottery refers to the big lotteries that are available in many states at the same time. This often means these lotteries have larger jackpots. The likes of Mega Millions and Powerball are all multi-state lotteries. If you win $5,000 or more from the lottery, including multi-state, the 24% federal tax will be applied.

What Happens If I Don’t Report My TN Gambling Winnings?

You should never avoid reporting gambling winnings in Tennessee. It doesn't matter if you're winning at BetMGM Tennessee or any other legal sportsbook, there can be serious consequences in the event that federal and state taxes are not filed correctly. Luckily in Tennessee, all you need to worry about is your federal income tax return for reporting your gambling winnings. Use our TN Gambling Tax Calculator to figure out how much you might owe. As a reminder, a federal tax of 24% is often applied if you win $5,000 or more total over the course of the year.

The W-2G is a common form you might receive when tax season comes around if you earned a significant amount in winnings during the year. As we saw earlier in this article, the gambling institution will issue you this form if break the aforementioned thresholds.

How Does The IRS Know If You Won Money Gambling?

All gambling establishments are required to report the activity of their users, it is easy for the Internal Revenue Service to cross-check this information with the amount that is reported on your income tax return. It is necessary to report the total amount of any gambling win throughout the year when doing your Tennessee income taxes. Failing to do so can result in serious penalties.

What Happens If I Forget To Report Gambling Losses Or Winnings In Tennessee?

Should you forget to report your gambling winnings it is important that you report them as soon as possible. No matter how much you earn from gambling winnings in a year, it is still necessary to report this amount. While it is true that the IRS may not notice if you forgot to report a small sum of gambling winnings, failing to accurately file your taxes can result in serious consequences.

If you earn a significant amount in gambling winnings in a year, gambling institutions will automatically issue a W-2G form. Receiving this form should serve as a good reminder to make sure all of your winnings are accurately reported.

Tennessee Sports Gambling Tax History

Sports betting become legal in the state of Tennessee on November 1, 2020. The legislation that was passed allowed for both retail and online sports betting. When sports gambling became legal, it became subject to the same taxes as other forms of gambling in the state on all of the first sportsbooks to the market including DraftKings Tennessee. The federal tax threshold of 24% on winnings equal to or greater than $5,000 has remained the same since this time. All gambling winnings must be reported. Use our TN tax calculator to learn more about how much you could owe this year.

Tennessee Gambling Tax FAQs

Author

Stefan Krysa

Stefan Krysa is a freelance sports writer based in Montreal, Quebec, Canada. Born in the U.S. and raised in Canada, he is an avid fan of both American and Canadian sports, and is committed to providing up-to-date information regarding sports betting across North America.