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 ($12,400 for 2020), you must file Form M1 and include Schedule M1NR, Nonresidents/Part-Year Residents. To determine your Minnesota gross income, see Calculating Minnesota Gross Income.

Note: Gambling winnings are not covered under income tax reciprocity agreements with Michigan and North Dakota. For details, see Reciprocity.

If you’re a Minnesota resident, you may qualify for a Minnesota tax credit. For details, 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 details, contact your state’s tax department.

Yes. Your records should include:

• 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 prove your winnings and losses with any of these:

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

For details, see Internal Revenue Service Publication 529.

You may deduct gambling losses 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. You will need records to prove your amount of losses claimed.

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 details, see Alternative Minimum Tax.