HomeVermont Gambling Taxes

Vermont gambling taxes

The thrill of winning big while sports betting is a wonderful feeling, but remembering that winnings are taxable can sour things. To help alleviate the burdens of tax preparations, we’ve crafted our Virginia Gambling Taxes Calculator as well as answered a few important tax questions.

Dan Bradley By: Dan Bradley
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Table of contents

Is paying tax on gambling in Vermont required?

Yes, paying tax on gambling in Vermont is required. Gambling winnings are taxable income at the state and federal level, so you will need to include your wins and losses when filing your tax paperwork.

The forms can be somewhat intimidating to file, so be sure you are working through them carefully. If you run into issues or if you want to verify you prepared your forms correctly, we highly recommend that you consult a tax expert. The minor costs associated with using a tax professional pale in comparison to the fines and penalties for not filling out the paperwork correctly.

What are the gambling tax rates in VT?

The gambling tax rates in VT are a flat 6% rate for sports betting by Vermont bettors and a 7.25% rate for non-Vermont residents who gamble in the state. This is in addition to the federal 24% withholding rate.

This is slightly different than the tax rate for the state lottery; lottery winnings are taxed at 6.72% for prizes between $600 and $5,000. Prizes exceeding $5,000 are taxed at a 6% rate.

Reporting taxes for Vermont gambling winnings

The process for reporting taxes for Vermont gambling winnings is relatively straightforward and is a required part of filing the paperwork. Here’s how you can do it.

  1. Determine the amount of your winnings and losses: If you’ve kept thorough, accurate notes on your winnings and losses throughout the year, this step should be pretty easy., Additionally, you may receive a W-2G form from the betting operator which would contain this information. The important boxes on the W-2G will be Box 1 (reportable winnings) and Box 4 (federal tax withheld). You will need these for both your federal and state returns.
  2. Input the correct amounts on your tax form: After you’ve calculated your yearly winnings and losses, input the total amount of your winnings into the “Other Income” box on your 1040 tax form. This will also be included on your Vermont filing form (IN-111)
  3. Send in your completed tax paperwork: Finally, whether you are e-filing or sending via USPS, you’ll need to submit your tax filings by April 15.

Are gambling losses deductible on my Vermont tax return?

No, gambling losses are not deductible on your Vermont tax return. This is because the state uses the federal adjusted gross income (AGI) and does not allow deductions in most cases. You will not be able to deduct the losses when filing your state-level return.

Which forms do I need to report gambling taxes in Vermont?

You will need the following forms to report gambling taxes in Vermont.

  • Form 1040 (U.S. Individual Tax Return)
  • Form IN-111 (Vermont Individual Tax Return)
  • Form 1099/W-2/etc (proof of income from your employer)
  • Form W-2G (Certain Gambling Income), if applicable
  • Receipts of sportsbook transactions, including all wins and losses for the calendar year

FAQ

Is there a threshold amount that triggers reporting of gambling winnings to the Vermont tax authorities?

If you win any amount while gambling in Vermont, you have passed the threshold and must report your winnings to tax authorities. All gambling winnings are considered taxable income and therefore must be reported.

How do I declare gambling winnings from online gambling sites in Vermont?

You can declare gambling winnings from online gambling sites in Vermont when filing your federal and state tax returns. On the federal form, you will include your winnings as “other income;’ then, you will use the total adjusted gross income (AGI) from your federal return to determine your Vermont tax liability.

Are there any specific tax rules for professional gamblers in Vermont?

No, there are no specific tax rules for professional gamblers in Vermont. However, this is because professional gambling is illegal in Vermont, according to the Attorney General’s website.

Can I offset my gambling winnings with gambling losses on my Vermont tax return?

No, you cannot offset your gambling winnings with gambling losses on your Vermont tax returns. Vermont uses the federal adjusted gross income (AGI) when determining your taxable income, and there aren’t exemptions or deductions you can claim for gambling winnings.

Author Details

Dan Bradley

Dan Bradley

Dan Bradley is a sports betting analyst at VT Betting. With numerous years under his belt producing sports betting content, Dan also boasts a background in junior hockey. Outside of writing, he passionately follows the NHL.