Bill > SF605

This bill modifies Iowa's tax withholding regulations for gambling winnings, specifically expanding the rules to include sports wagering. Currently, state income tax is withheld on gambling winnings from various sources like slot machines and other gambling activities at different monetary thresholds. The bill adds a new provision that requires state income tax to be withheld on sports wagering winnings whenever federal income tax is also required to be withheld, in accordance with the Internal Revenue Code. Additionally, the bill explicitly defines winnings from sports wagering as "Iowa earned income" that is subject to both state and federal income tax laws. The amounts withheld from these sports wagering winnings will be remitted to the Iowa Department of Revenue on behalf of the winner. The bill is set to take effect on January 1, 2026, which allows time for gaming and tax authorities to prepare for the new withholding requirements.

Budget and Finance

Ways & Means (Senate)

https://www.legis.iowa.gov/legislation/BillBook?ga=91&ba=SF605