For federal taxes, lottery winnings are taxed according to the federal tax brackets. Federal tax brackets are progressive, so portions of the winnings are taxed at different rates, and could be as high as 37%. State income taxes vary by location. Some states do not have a state income tax, while others may withhold up to 8.82%. The states that. Rules for Deducting Gambling Losses Under the new law, those who itemize deductions will continue to be able to deduct gambling losses up to the amount of their total winnings. For example, a slot player who wins $25,000 in jackpots may deduct up to that amount in verifiable gaming losses when they fill out an itemized tax form.

(St. Paul- MN) This session, Senator Carrie Ruud (R-Breezy Point) and Representative Dale Lueck (R- Aitkin) have co-introduced bills related to charitable gambling. The legislation would reduce the taxes rates across the board for charitable gambling, impacting activities like pull-tabs, bingo, and paddlewheels among others.
Senator Ruud and Representative Lueck issued the following joint statement:
“Adoption of these new charitable gambling provisions is a critical issue in the legislature since they have such a significant impact on our VFW’s, American Legions, businesses, and many other organizations that our district care about. Our bill will lower the tier of tax rates across the board, allowing these groups to keep more of their charitable gambling profits to reinvest back into their communities and businesses.”
It has been reported that charitable gaming will remit over $95 million in gambling taxes and fees to the state in 2019 fiscal year. That is more than double the $40 million of just six years ago. Per the 2018 Gambling Control Board Organization Annual Report, 340 charities, or 30% of the charitable gambling organizations in Minnesota, pay more to the state than they do to support their communities and missions.

Michigan Gambling Tax Rate

Minnesota Charitable Gambling Tax Rate

In the Senate, the legislation was heard Thursday and laid over for possible inclusion in the tax omnibus bill, but in the House, the companion bill is still awaiting movement in the tax committee.