Bad States for Amateur Gamblers

All states are alike, right? That’s definitely not true in the world of tax. Some states don’t have an income tax. Other states have very high income tax rates. Amateur gamblers have a special concern: The ability (or lack thereof) to deduct gambling losses.

For an amateur gambler, gambling losses are an itemized deduction. On the federal tax return, an amateur gambler is allowed to deduct his losses up to the amount of his wins on Schedule A. However, some states do not allow any itemized deductions while some specifically do not allow gambling losses. Here is a list of the “bad” states for amateur gamblers:

  • Connecticut*
  • Hawaii*
  • Illinois*
  • Indiana*
  • Louisiana (Itemized Deduction Limitation)
  • Massachusetts*
  • Michigan*
  • Minnesota* (State AMT — Impacts Amateurs)
  • New Hampshire (10% Gambling Tax)
  • New York (Itemized Deduction Limitation)
  • Ohio*
  • West Virginia*
  • Wisconsin*

So while all men may be created equally, all gamblers are not taxed equally. Of course, you could reside in a state with no income tax and you’ll be more equal than others.

2 Responses to “Bad States for Amateur Gamblers”

  1. […] Bad States for pledge gamblers Taxpayers have $1.3 billion in unclaimed refunds […]

  2. Greg says:

    Illinois may not allow a deduction for gambling losses, but it does have one of the lowest income tax rates in the country – 3% – and it’s not graduated, so if you make $1 or $1 million, you still pay only 3% tax.

    Of course, Illinois is right behind California in f’d up finances, but even if they double the tax rate, it’ll only be 2/3 of California’s….