How bad are gambling taxes in CT… did I mess up

Seeking Advice
1

I just turned 21 and started using FanDuel for fun, but it got out of hand. I ended up with $423,595.07 in total winnings, but my net winnings are only $7,800. I heard that in CT I’ll be taxed on the $423,595.07 and can’t deduct my losses. How much will I be taxed, and is there any way to reduce this? I’m not rich and feel like I’ve made a huge mistake. I’ve completely lost any interest in gambling after learning about these taxes. Can someone explain how gambling taxes in CT work or offer advice?

2

You’re in a tough spot. You need to hire a CPA who knows gambling laws. They might be able to help you use “sessions” to calculate things differently, but it’s still not looking good. You’ll also owe taxes to the IRS.

https://www.cga.ct.gov/2024/rpt/pdf/2024-R-0166.pdf

3

@Hale
This is wild. Why would anyone in CT gamble? You could win a million dollars but spend $2 million to do it, and you’d still owe taxes on the million?

4

Toni said:
@Hale
This is wild. Why would anyone in CT gamble? You could win a million dollars but spend $2 million to do it, and you’d still owe taxes on the million?

Yep. They make a lot of money off places like Mohegan Sun.

5

@Hale
Wow. I’m surprised people in CT gamble at all. Even California lets you deduct gambling losses if you itemize.

6

Toni said:
@Hale
Wow. I’m surprised people in CT gamble at all. Even California lets you deduct gambling losses if you itemize.

Hold on. If you win money in CT, you have to file a CT non-resident return. Some states don’t even give credit for taxes paid to other states on gambling.

7

@Hale
So if you’re a CT resident, you can’t deduct losses, even if you itemize? Is that right?

8

Toni said:
@Hale
So if you’re a CT resident, you can’t deduct losses, even if you itemize? Is that right?

That’s right, and the same rules apply to non-residents. For example, if someone from NY won a million-dollar jackpot in CT and spent it all gambling again, they’d still owe about $68,500 on a non-resident return.

9

@Hale
And CT residents also can’t deduct their losses either? That’s insane.

10

Toni said:
@Hale
And CT residents also can’t deduct their losses either? That’s insane.

The law is the same for residents and non-residents. Most people gambling in CT casinos are from out of state, and they all have to file non-resident returns and pay tax on gross winnings.

11

@Hale
That’s just ridiculous. Taxing the full winnings without letting people deduct losses makes no sense.

12

Toni said:
@Hale
That’s just ridiculous. Taxing the full winnings without letting people deduct losses makes no sense.

Honestly, this sounds like one of the most frustrating tax rules I’ve heard of. It’s like the system is rigged to make sure gamblers lose even more.