Gambling Winnings

It depends on your residency at the time you received the winnings:

• If you were a Minnesota resident, Minnesota taxes all of your gambling winnings. This includes winnings from Minnesota, anywhere else in the U.S., other countries, and Internet gambling. You must report them on your Minnesota return (Form M1, Individual Income Tax).
• If you were a nonresident, Minnesota taxes your gambling winnings from Minnesota. If your Minnesota gross income meets the state’s minimum filing requirement ($10,650 for 2018), you must file Form M1 and include Schedule M1NR, Nonresidents/Part-Year Residents. For more information, see Calculating Minnesota Gross Income.

If you’re a Minnesota resident, you may qualify for a Minnesota tax credit. For more information, see Credit for Taxes Paid to Another State.

If you’re a nonresident and pay income tax in your home state, you may be able to claim a credit for taxes you paid to Minnesota on your winnings. For more information, contact your state’s tax department.

Yes, since we may have questions about these items on your tax return. Your records should include at least the following information:

• Dates and types of specific wagers or gambling activities
• Names and locations of the gambling establishments involved
• Amounts you spent when you won or lost

You may need to provide further documentation if you’re claiming a deduction for gambling losses. You can generally prove your winnings and losses with any of the following:

• Federal Form W-2G
• Cancelled checks
• Cash register receipts
• Credit records
• Bank withdrawal forms
• Payment slips from the gambling establishment

For more information, see Internal Revenue Service Publication 529.

You may deduct gambling losses on your Minnesota income tax return if you choose to claim Minnesota itemized deductions. You cannot deduct more in gambling losses than you report in gambling winnings on your federal income tax return. Also, you must be able to prove the amount of your losses with the records noted above.

To deduct gambling losses, complete Schedule M1SA, Minnesota Itemized Deductions. Include Schedule M1SA when you file Form M1, Individual Income Tax.

Note: Minnesota does not allow deductions for gambling losses when calculating and paying the state Alternative Minimum Tax (AMT). Since state and federal rules differ, you may have to pay Minnesota’s AMT even if you did not on your federal return. For more information, see Alternative Minimum Tax.