Bill > HF794

This bill modifies Iowa state laws regarding income tax withholdings on gambling winnings, specifically focusing on sports wagering. The legislation amends two sections of the Iowa Code to clarify that winnings from sports wagering are considered Iowa earned income and are subject to both state and federal income tax laws. The bill introduces a new provision that requires state income tax to be withheld from sports wagering winnings whenever federal income tax is also required to be withheld, which aligns with federal Internal Revenue Code requirements. Currently, the state already has tax withholding requirements for other types of gambling winnings, such as those from slot machines, lottery games, and other gambling activities, with different monetary thresholds triggering withholding. The new rules for sports wagering tax withholding will take effect on January 1, 2026, giving businesses and tax authorities time to prepare for the implementation of these updated regulations. This change ensures that sports wagering winnings are treated consistently with other forms of gambling income for state tax purposes.

Budget and Finance

Ways and Means (House)

https://www.legis.iowa.gov/legislation/BillBook?ga=91&ba=HF794