Maine Gambling Winnings Tax Calculator: ME Gambling Tax Laws Explained

Maine, the only state with one syllable tucked away in the corner of New England, has numerous ways to generate gambling income. The state lottery has been around since 1974, Maine sports betting is pending launch after becoming legalized in August 2022, and there are land-based casinos.

However, with gambling winnings comes federal taxes and Maine gambling taxes. This page is dedicated to serving as a Maine gambling tax calculator and catching you up to speed on how to claim and report your income and more.

Maine Gambling Tax Calculator

Below you’ll find a Maine gambling tax calculator tool. While it’s not an exact science, this will give you a baseline of what to expect by providing information like your relationship status, gambling winnings, state, and more.

Give our Maine gambling tax calculator tool a try for yourself.

The Maine gambling taxes on lottery winnings and other gambling winnings follow the state taxes rates, which fluctuate depending on your total income, resulting in a different tax bracket.

In addition to the Maine income taxes rate, the Maine State Lottery has taxes on lottery winnings, which include 24% for the federal (top federal tax rate) and the highest state income tax rate of 7.15%.

Are Gambling Winnings Taxable in Maine in 2023?

There are Maine gambling winning taxes in 2023, and federal and state income tax rates apply. On prize money north of $5,000 (lump sum payment or in total), you’ll be subject to the highest tax rate in Maine of 7.15% in addition to a 24% federal tax rate. You’ll also receive a W-2G form from the State Lottery in January if you win over $600.

What are the Gambling Tax Rates in Maine?

As mentioned, the Maine gambling taxes on lottery winnings depend on your income and overall gambling winnings. If you win over $5,000, you’ll be held to a 24% federal tax rate and the maximum income tax rate of 7.15%.

Below, we’ll look at three state income tax brackets in Maine.

• A single taxpayer ($0-$22,999); Married filing status ($0-$45,999) | 5.80%
• A single taxpayer ($23,000-$54,449); Married filing status ($46,000-$108,899) | 6.75%
• A single taxpayer ($54,450 or more); Married filing status ($108,900 or more) | 7.15%

History of Gambling Tax Regulation

Since the Maine State Lottery launched in June 1974, the gambling tax regulation has been overhauled to reflect the current state of gambling affairs, which include the lottery, land-based casinos, and sports betting; when it launches, it may have an impact, too.

When the Maine State Lottery first launched, it had a tax rate north of 20% on gross sales of lottery tickets.

Later, when slot machines or “racinos” launched in the early 2000s, slot machine income was taxed at 39%, eventually dropped below 30%, then more recently back to a rate in the high 30% range.

As for casinos, the slot machine tax rate for casinos remained the same, but table games are around 16%.

How Does The IRS Know If You Won Money Gambling?

Including your gambling winnings when doing your yearly Maine gambling taxes is essential because the Internal Revenue Service (IRS) will be aware of them. The IRS becomes aware of your gambling winnings in Maine because, for example, the Maine State Lottery will file a W-2G form if your winnings exceed $600.

How to Claim and Report Maine Gambling Winnings for Taxes

As mentioned, you’ll be issued a W-2G form on all gambling winnings in Maine that exceed $600. As you’ll see on the W-2G form, you’ll file this with Form 1096. This form will include your reportable winnings, when they were won, and more.

There are some slightly different standards for when a W-2G is issued, depending on the type of gambling. The $600 threshold pertains to “other betting,” however, you’ll only receive one for bingo/slots, keno, or a poker tournament for the following amounts:

• Bingo/Slots: $1,200 or more
• Keno: $1,500 or more
• Poker Tournament: $5,000 or more

Those thresholds above are nationwide.

What to Do if You Do Not Receive a W-2G Form in Maine?

It could be for a few reasons if you don’t receive a W-2G form in Maine. One reason could be that you didn’t meet the thresholds mentioned above. However, even if you don’t meet those thresholds, you must still report the income. Also, you could not receive a W-2G form for other clerical reasons. If, for whatever reason, you don’t receive this form, you’re still required to report your winnings on Form 1040 under “Other Income.”

Can I Deduct Gambling Losses in Maine?

You must report your total gambling winnings on IRS Form 1040 to claim gambling losses as deductions. You’ll deduct gambling losses on Schedule A (under Form 1040). According to the Maine State Lottery site, you cannot “deduct gambling losses that are more than your winnings.” The Maine State Lottery will not retain this information, so you must keep your non-winning tickets for tax records.

What If I Lost More Than I Won Gambling?

As mentioned above, you can claim gambling losses if you hold onto the losing tickets for your tax records. However, if you won, let’s say, $6000 from gambling but lost $7,000, you can only deduct the $6,000 as you cannot claim deductions more than you’ve won.

What Happens If You Forget To Report Gambling Losses in Maine?

If you forget to report your gambling losses, you could file the 1040X-ME form, which is used to correct income tax returns. We also encourage you to contact a tax professional.

Maine Lottery Taxes

For Maine Lottery winnings, you’ll be subject to both federal and state tax rates. On prizes over $5,000, you’ll be taxed at 24% federally and 7.15% from the state, which is the highest bracket of personal Maine income taxes. You’ll still need to file your winnings even if they’re less than $5,000, and you’ll receive a W-2G form on winnings over $600.

How Are Group Lottery Wins Taxed in Maine

Whether you’ve had lottery winnings as a single player or in a group, you’re still subject to filing your winnings individually. The rates remain at 24% federally and 7.15% in the state. Unlike other states, there are no gift tax rates in Maine.

Taxes on Multi-State Lottery Wins

Whether you play a state-based lottery game or participate in one across multiple states, like neighboring Vermont, New Hampshire, Megabucks, or Powerball, you’re still subject to the 24% federal and 7.15% from state tax rates. This applies to annuity payments/the annuity option, but it does get a bit different for a lump sum.

In 2022, a Maine resident won a $1.5 billion Powerball drawing. The lump sum lottery winnings were $745.9 million as a net payout.

A lump sum payout is subject to the 24% rate. You’ll also owe another 13% when it comes time to pay Maine gambling winning taxes on lottery wins.

What Happens If I Don’t Report My Gambling Winnings?

Forgetting to report any form of income, whether gambling or otherwise, could result in penalties, fines, or audits.

If you forget to file anything gambling winnings-related, consult a tax professional.

We cannot stress the importance of reporting your income and paying Main gambling taxes. You could also see an increased tax rate of 28%, and jail time is possible.