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Learn about gambling and the lottery in Massachusetts

Part-year residents are taxed on gambling and lottery winnings received as a Massachusetts resident.

Nonresidents are taxed on gambling and lottery winnings from Massachusetts sources. This includes:

  • Casinos and slots parlors located in Massachusetts
  • Massachusetts lottery
  • Multi-jurisdictional lottery if the ticket was bought within Massachusetts
  • Pari-mutuel wagering paid by Massachusetts racetrack or simulcast center
  • Any other wagering transaction within Massachusetts

Massachusetts allows you to deduct the cost of any winning ticket or chance from the winnings you received from it, reducing your taxable lottery and gambling income. Even if you buy other tickets during the year, you can only deduct the cost(s) of the winning ticket(s). You cannot deduct losses you claim as itemized deductions on U.S. Form 1040, Schedule A.

Please note: If you were a Massachusetts resident for part of the tax year, and while you were not a resident of Massachusetts you received Massachusetts gambling or lottery income, file as both a nonresident and part-year resident. Fill in the “Filing as both a nonresident and part-year resident” oval below the address section of the form if this category applies to you. Complete Schedule R/NR, Resident/Nonresident Worksheet, to calculate the portion of income earned while a nonresident and the portion of income earned while a part-year resident.

If you’re submitting an abatement/amended tax return, attach:

  • The corrected Form W-2G, Certain Gambling Winnings
  • Documentation to prove the correct winnings

Gambling winnings

Cash winnings are included in federal gross income and so you must include it in Massachusetts gross income. Cash winnings include:

  • Dog and horse track betting, jai alai, and other wagering transactions
  • Sweepstakes and wagering pools
  • Bingo or beano, keno and slot machines
  • Poker tournaments, including casinos
  • Raffles or any other events of chance

Gambling winnings also include the fair market value of non-cash prizes such as cars, houses, and trips.

Reporting gambling winnings (Massachusetts and out-of-state)

For federal purposes, report your total winnings on your U.S. Form 1040 Schedule 1 and report all your losses (cost of buying all your tickets for the taxable year, not only your winning ones, and only up to as much as you won) on U.S. Form 1040, Schedule A, Itemized Deductions.

For Massachusetts purposes, report your net winnings (total winnings minus cost of winning ticket(s)) on MA Form 1 or MA Form 1-NR/PY (Schedule X, Line 3). Do not enter less than “0.”

When filing, you’ll be notified if you didn’t report your gambling winnings, or if the amount you reported doesn’t match our records. If you indicate that you didn’t have any winnings, the system will allow you to proceed. However, your tax refund will be held up and you’ll receive a letter requesting that you submit documentation to verify the correct amount.

Additional Resources for

Lottery winnings

You must include winnings from the Massachusetts state lottery and non-Massachusetts lotteries in your Massachusetts gross income.

If you win more than $600 the payer must give you a Forms W-2G when you receive your winnings. If not, they must send you the form before January 31 of the following year.

If you win more than $5,000, you will also be taxed federally. When winnings include items that are non-cash prizes (e.g., a car or a boat), the items will be assessed at their fair market value.

If you owe any past-due child support or a past-due tax liability, the State Lottery Commission will notify the Commissioner of your name, address, and Social Security number and send the winnings to the Child Support Enforcement (CSE) Division or appropriate division to satisfy your child support obligations or past due liabilities.

The Lottery Commission pays out winnings in this order:

  1. Statutory state and federal tax withholding
  2. The full or partial amount of the prize to satisfy any past-due child support obligation
  3. The full or partial amount of the prize to satisfy any past-due tax liability
  4. The rest of the prize (after liabilities have been paid) goes to you

We routinely match the amounts in MA Form 1 (Line 8b) or Form 1-NR/PY (Line 10b) with files from the Lottery Commission.

Reporting lottery winnings

For federal purposes, report your total winnings on your U.S. Form 1040, Schedule 1 and report all your losses (cost of buying all your tickets for the taxable year, not only your winning ones, and only up to as much as you won) on U.S. Form 1040, Schedule A, Line 16 Miscellaneous Deductions.

For Massachusetts purposes:

  • Massachusetts state lottery winnings – Report your net winnings (total winnings minus cost of winning ticket(s)) on MA Form 1 (Line 8b) or MA Form 1-NR/PY (Line 10b). Do not enter less than “0.” You cannot deduct losses claimed as itemized deductions on U.S. Form 1040, Schedule A.
  • Out-of-state lottery winnings – Report your net winnings (total winnings minus cost of winning ticket(s)) on MA Form 1 or MA Form 1-NR/PY (Schedule X, Line 3). Do not enter less than “0.” You cannot deduct losses claimed as itemized deductions on U.S. Form 1040, Schedule A.

When filing, you’ll be notified if you didn’t report your gambling winnings, or if the amount you reported doesn’t match our records. If you indicate that you didn’t have any winnings, the system will allow you to proceed. However, your tax refund will be held up and you’ll receive a letter requesting that you submit documentation to verify the correct amount.

View tax information on gambling and the state lottery in Massachusetts. Find out how to report your winnings, what they mean for your tax returns, and more. ]]>