Figuring out how much state tax you owe on your gambling winnings can be tricky. If you're curious about Mississippi gambling taxes, this article should clear things up. Keep reading, and we'll explain how Mississippi taxes gambling winnings, and how much you might owe on your latest payout.
By far the easiest way to figure out how much Mississippi betting tax you owe on your gambling winnings is to use our Mississippi Gambling Tax Calculator. Just input the required information in the calculator below, and we'll tell you how much you owe in state tax, and how much you get to keep from your winnings.
In Mississippi, gambling winnings are reported on an income tax return (W2G or 1099 form) and are taxable at a rate of 3%.
However, the way that Mississippi taxes on gambling, this income is non-refundable, and the tax should simply be withheld from you by the casinos in the first place. This might not seem like a lot of revenue for the state, but Mississippi also levies a tax on 12% of each casino or retail sportsbook's gross income. In a sense, Mississippi taxes gaming losses more heavily than it taxes winnings.
Yes, they are! According to Mississippi sports betting tax laws, gambling winnings reported on your Mississippi tax return are taxable at a non-refundable rate of 3%. By non-refundable, it means that Mississippi state law decrees that though you declare gambling winnings on your income tax return, you can't count your winnings as income toward an income tax credit or refund. This might seem strict, but it's not only Mississippi gambling winnings that are taxable — Mississippi taxes casino profits (a.k.a. gambling losses) at a much higher rate.
The gambling tax rates in Mississippi are very straightforward and easy to understand. On all Mississippi gambling winnings that you report on your income tax return, the tax rate will be set at 3% non-refundable, withheld at the point of payout (which means you don't pay it yourself, you just report it on your Mississippi tax return, and then you don't have it refunded to you as part of a tax refund).
According to federal law, you must claim and report Mississippi gambling winnings for taxes on your income tax return. Sportsbooks will already report all your winnings over $600 to the IRS. However, depending on the nature of your bet and how much you win, the party that pays out your bet might also give you a tax form (likely a W-2G, a 1099-MISC, or a 1099-K). On top of this form, you must also report your winnings as income on your Form 1040, Schedule 1, Line 8, under "Other Income."
It’s possible the IRS could ask you to substantiate wins and losses. If that happens, the following documentation will be helpful:
While you should receive a W-2G or a 1099 form (either one works) to indicate your taxable gambling income, it's possible that your operator might not give you one if your winnings are below the federal limit.
If you do not receive a W-2G form from your Mississippi sportsbook or casino, it's still important to be sure to report any gambling winnings as income on your Mississippi tax return (Form 1040: Schedule 1, Line 8) under "other income." Depending on your situation, you might also consider consulting a tax professional.
By and large, the answer to the question "can I deduct gambling losses in Mississippi?" is yes and no. Mississippi law dictates that you can in fact deduct gambling losses that you've incurred at gambling establishments outside Mississippi, but not at a casino or sportsbook based inside the state.
MS is a little unusual in this regard, but the general rule according to federal law is if you itemize your taxes you can claim a standard deduction on gambling losses. The deduction is capped at your total winnings. If you lose $2,000 and have $1,000 in winnings, the most you can deduct is $1,000.
Mississippi lottery taxes function very similarly to gambling taxes. According to Mississippi tax law and the Mississippi Lottery Corporation — the state regulator — prize winnings reported above $600 are subject to the standard state tax of 3% (the same as for gambling winnings). For all winnings above $5,000 or more, the federal tax rate of 24% will be withheld at the time of payout.
The Mississippi Lottery Commission (MLC) will only pay out winnings to one claimant. If you are a member of a group buying lottery tickets collectively then one person acts as the claimant. You have to accompany the claim with IRS form 5754. Each member of the group must report the win on their individual tax return. If a member of the group owes any back taxes these will be calculated as part of the tax owed from your lottery win.
In the state of Mississippi, the lucky winners of multi-state lotteries — like Powerball and Mega Millions, for example — will have the same tax framework apply to their winnings as we explained earlier: any winnings over $600 are taxed at the 3% non-refundable state tax (the same as the Mississippi gambling winnings tax), while anything over $5,000 is taxable federally, at a rate of 24% which will be withheld when the winnings pay out.
At the end of the day, you have to report your gambling winnings. If you don't, you could be subject to prosecution or other criminal charges. On top of that, in Mississippi, the taxes are withheld at the point of payout by the casino or sportsbook that you're betting with. That means that there's no benefit to not reporting your winnings, since you've already paid the taxes. All you have to do is report them, and you're good to go.
Yes, it is and has been since 2018. There are about two dozen retail sportsbooks in operation. However, the online wagering market here is virtually non-existent. You have to be on casino premises to use a sports betting app, and the only such sportsbook to launch so far is BetMGM, which went live in September 2021.
If you want to place a sports bet in Mississippi, you will need to be at least 21 years old. This is the minimum age you need to be to enjoy casino gaming in Mississippi - and these are the only premises where licensed sports betting takes place in the Magnolia State.
Martin Booth is an award-winning contributor covering sports betting and casino gaming around the world for decades, Martin is one of the most trusted voices in online gambling, from legislative updates to breaking down the top betting apps in various states.