Do I have to pay tax on gambling in Michigan?
Yes, you do have to pay tax on gambling in Michigan. Your gambling winnings are taxable income at the state and federal levels.
Michigan sportsbooks, casinos, and their online counterparts are all subject to taxation as well. As of April 2024, online gambling activities have generated more than $1.3B in tax dollars for Michigan’s state and local governments.
What are the tax rates for gambling in MI?
The tax rate for gambling for individuals in MI is a flat 4.25% rate across all tax brackets. This is in line with the state’s 4.25% income tax rate.
You may also be able to deduct some of your gambling losses when filing your returns. Under Senate Bill 764, which was signed into law by Gov. Gretchen Whitmer in 2021, if you end the year with a net loss on gambling winnings, you can deduct the losses from your return.
However, you can only do this if you are itemizing your deductions rather than taking the standard deduction.
Betting operators are taxed at 8.4% rate on their adjusted gross gambling receipts. This percentage is broken up among the State (which receives 3.78 percent of the tax) and the City of Detroit (which receives 4.62 percent).
Steps to take to file taxes for Michigan gambling winnings
The following steps will help you to file taxes for Michigan gambling winnings. If you’re still concerned you’ve not done things correctly, we highly recommend consulting with a tax professional, as they can guide you through the process in ways we cannot.