HomeNorth Carolina Gambling Tax

North Carolina Gambling Tax

Following North Carolina’s sports betting launch on March 11, 2024, the concern for many gamblers is how betting activities will impact their tax returns. On this page, we’ll explain what betting-related money you’ll need to plan for when filing your taxes.

Dan Bradley By: Dan Bradley
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Is it required to pay tax on gambling in North Carolina?

Yes, you are required to pay tax on gambling in North Carolina. Your betting winnings are considered taxable income on both your state and federal returns, and there will be a slightly different process for how to include your winnings on the correct forms.

If you’re feeling a bit confused or intimidated by the process, we highly recommend using a certified tax expert to help you prepare your tax forms. Sportsbooks will be required to send you the forms at the end of each year so you can file accurately, but it can be a lot to manage, so trust the pros, especially if you’re new to filing with gambling winnings.

Gambling tax rates in NC

North Carolina has a flat 5.25% tax rate on gambling winnings. This rate is in addition to the federal withholding tax rate of 24% on gambling winnings.

Sports betting winnings as well as winnings from the North Carolina Education Lottery are taxed at this same 5.25% rate. This also applies to any winnings made at the state’s casinos.

How do I report taxes for North Carolina gambling winnings?

Reporting taxes for your North Carolina gambling winnings can be a bit confusing the first time around, but the process will continue to be the same on future filings. Here’s what you’ll need to do.

  1. Calculate your wins and losses: Throughout the year, you will want to keep a record of the winning wagers and losing bets you make. You will likely get a copy of your net wins and losses at the end of the year from the gambling operators you’re using, but having your own copies will help you verify that the records they have are accurate.
  2. Put your total winnings onto the tax form: On your federal form, you will need to include your gambling winnings as “Other Income” in box 1h (line 8). For your state return, you can copy over your total from Box 15 on your federal income tax return onto form D-400.
  3. Send in your returns: You have the option to either e-file or mail in your tax returns. If you’re filing annually, make sure you’ve completed the forms by April 15!

Are gambling losses deductible on my North Carolina tax return?

No, gambling losses are not deductible on your North Carolina tax return. Whether you’re itemizing or taking the standard deduction, the state tax code does not allow you to claim your losses in this manner.

Do non-residents need to pay taxes on gambling winnings earned in North Carolina?

Yes, you do need to pay taxes on gambling winnings earned in North Carolina even if you are a non-resident. For part-year residents or visitors to NC, you should be able to access the return forms online or through tax preparation software.


FAQ

What advice do tax professionals give to frequent gamblers in North Carolina regarding tax planning?

The biggest piece of advice tax professionals give to frequent gamblers in North Carolina regarding tax planning is to keep detailed records of everything. Even without being able to itemize, having accurate records of your wins and losses is critical to filing your forms correctly. Additionally, it may be worth your time to file quarterly tax returns instead of annually.

Are there any recent changes to gambling tax laws in North Carolina that might affect me?

No, there are no recent changes to gambling tax laws in North Carolina that might affect you. However, if that changes, we will continue to update this page as state tax codes change.

Are winnings from daily fantasy sports taxed in the same way as other gambling winnings in North Carolina?

Yes, winnings from daily fantasy sports are taxed in the same way as other gambling winnings in North Carolina. This is because DFS winnings are considered taxable income and are subject to the state’s 5.25% tax rate.

If I win a car or other non-cash prize, how is the value taxed in North Carolina?

If you win a car or other non-cash prize, you will be taxed on the fair market value of the item you received as defined in the terms and conditions of the event wherein you won the prize. In some cases, this may make it more beneficial for you to decline the prize if paying the tax on the prize is more than what you can afford.

Author Details

Dan Bradley

Dan Bradley

Dan Bradley serves as editor and author for Betting NC. With a background that includes over 10 years of providing commentary for junior hockey leagues nationwide. Outside of his writing on sports betting, Dan loves to unwind by going fishing or catching an NHL game.