Do I owe New York state tax on sports betting and gambling winnings?
By the W2gMatch team · Sources checked 09-06-2026 · General information, not tax advice.
Yes. New York taxes gambling winnings at its graduated rates, 4% to 10.9%, with New York City and Yonkers residents paying a local tax on top. Losses are deductible only as a New York itemized deduction, limited to winnings; New York lets you itemize on the state return even if you did not federally. Nonresidents owe New York tax on winnings over $5,000 from wagers placed in New York.
How New York taxes the winnings
Gambling winnings are part of federal adjusted gross income and flow into New York adjusted gross income, taxed at the state's graduated rates from 4% to 10.9%. [1] New York City residents add the city income tax, and Yonkers residents the Yonkers surcharge. A New York Lottery prize over $5,000 is withheld at the highest state rate, and at the city and Yonkers rates where they apply. [2]
Losses on the New York return
“For New York income tax purposes, gambling loss deductions are limited to the amount of gambling income reported on your return,” claimed among the other itemized deductions on Form IT-196. [3] Since 2018 New York lets a taxpayer itemize on the state return “whether or not you itemized your deductions on your federal income tax return,” [3] so a federal standard-deduction filer with large winnings and losses can still deduct the losses in New York.
Whether New York's itemized deduction follows the federal 90% limit for tax years from 2026 depends on how New York's conformity to the federal itemized-deduction rules is read; the Department had not addressed it in the 2025 material read for this page.
What is withheld at the window
New York State withholding is required on winnings from a wager placed in New York when the proceeds are subject to federal withholding, [4] and on any New York Lottery prize over $5,000, at the highest rate of tax for the year with no allowance for deductions. [2] Ordinary sports bets below the federal withholding line have nothing withheld by the state.
Residents, part-year residents and visitors
Residents are taxed on winnings from everywhere. Nonresidents must include as New York source income “gambling winnings in excess of $5,000 from wagering transactions within New York State” and New York Lottery prizes whose proceeds exceed $5,000, reported on line 16 of Form IT-203. [1] [2] A wager placed on a New York-licensed app while in the state is a wagering transaction within New York.
What is legal in New York, and who sends the forms
New York's online sportsbooks were the second-largest commercial gaming market in the country in 2025 at $2.59 billion in revenue. [5] Each licensed app issues W-2Gs at the federal thresholds; casino play at the state's commercial and tribal casinos is reported by each property.
The federal return underneath
Federal: for tax years beginning in 2026, only 90% of gambling losses are deductible (the 90% gambling loss cap).
Every state page sits on the same federal rules: all winnings are reported on Schedule 1 whether or not a form arrives, and losses are an itemized deduction capped at winnings and, from 2026, at 90% of losses under amended section 165(d). The federal loss page and the by-state table show how New York compares.
Related questions
I took the federal standard deduction. Can I still deduct gambling losses in New York?
Yes. Since 2018 New York allows state itemizing regardless of the federal choice; the loss is limited to the winnings on the return.
I live in New Jersey and bet on a New York app while in Manhattan. Do I file in New York?
If your winnings from wagers placed in New York exceed $5,000 for the year, they are New York source income and go on Form IT-203.
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Sources
- New York State Department of Taxation and Finance, 2025 Instructions for Form IT-203, tax year 2025
- New York State Department of Taxation and Finance, Publication 140-W, FAQs: New York State Lottery winners, December 2006
- New York State Department of Taxation and Finance, Itemized deductions (2025), tax year 2025
- NerdWallet, New York State income tax rates and brackets for 2025-2026, 2026 (secondary source)
- American Gaming Association, State of the States 2026, 2026 (secondary source)
Related
This page is general information about how U.S. federal and state tax rules apply to gambling, written to be checked against the sources it cites. It is not tax advice for your situation. A licensed CPA or enrolled agent should review your return before it is filed.