Nonresidents with Gambling Winnings

Instruction Year

Complete the IA 1040, showing income from all sources, similar to your federal return.

Show gambling winnings on line 13.

Taxpayers with gambling winnings are eligible to claim gambling losses on IA Schedule A. Gambling losses are deductible only to the extent of gambling winnings reported on IA 1040, line 13. The gambling loss amount entered on your IA Schedule A shall only include losses from wagering transactions, and does not extend to business expenses incurred in the trade or business of gambling.

Example, if your gambling winnings for the year are $1,000, your IA Schedule A deduction for gambling losses cannot exceed $1,000. Taxpayers who claim the standard deduction on the Iowa return cannot deduct their gambling losses, although they must still report gambling winnings.

Complete the return through line 47.

Then use the IA 126 to determine your credit based upon the percentage of Iowa income to total income.

This credit is taken on line 48.

Include a copy of your federal return.