IowaIowa would require state tax withholding on certain sports winnings
If enacted, Iowa would require state tax withholding from sports betting winnings whenever federal withholding applies, with January 1, 2026, listed as the effective date.
What it does
State income tax would be taken from winnings on Iowa-authorized sports bets whenever federal income tax must also be withheld. The bill sets January 1, 2026, as its effective date.
Winnings from Iowa-authorized sports bets would count as income earned in Iowa and fall under state and federal income tax laws. Any state tax withheld would be sent to the state for the winner.
Argument forTaking Iowa tax out when federal withholding applies could help affected winners avoid a larger state tax payment later.
Argument againstTaking Iowa tax out of a covered win could leave the winner with less money from that payout right away.
More detail
Iowa would require state income tax to be withheld from covered sports betting winnings. This applies to winnings from sports bets authorized under Iowa's gambling law. Federal income tax must also be required to be withheld from the same winnings. The bill sets January 1, 2026, as the date this rule would take effect.
Winnings from Iowa-authorized sports bets would count as income earned in Iowa. This covers all winnings from sports bets authorized under Iowa's gambling law. Any state tax taken from the winnings would be sent to Iowa's revenue department on the winner's behalf. The bill sets January 1, 2026, as the date this provision would take effect.
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Where it stands
- Introduced
- Passed 1st Chamber
- Passed 2nd Chamber
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2025
- Mar 11Committee report approving bill, renumbered as SF 605.Latest
- Feb 25Subcommittee recommends passage.Minor
- Feb 20Subcommittee Meeting: 02/25/2025 10:00AM Room 217 Conference Room.
- Feb 19Subcommittee: Dawson, Bisignano, and Rowley.
- Feb 18Introduced, referred to Ways and Means.Introduced
Taxes & Budget