Tax Minute

MASSACHUSETTS GAMBLING LOSSES

If you itemize your deductions for Federal income tax purposes, you are allowed to take a deduction for gambling losses to the extent you have gambling winnings. The 2018 tax bill expanded the definition of gambling losses to include other expenses in connection with your gambling activity, not just actual losses. However, in Massachusetts you get no deductions for any gambling losses. For people who frequently go to casinos, this can lead to a huge tax bill in Massachusetts, even though you may have a net loss from your gambling activities for the year. In order to promote the new Massachusetts casinos, in 2015 the legislature changed the Massachusetts Tax Code to allow Massachusetts taxpayers to deduct their gambling losses at a Massachusetts casino against their gambling winnings at a Massachusetts casino and only pay tax on the net amount. This is great news for these casinos as well as the people who gamble there. Federal law prohibits states from passing laws that give an unfair advantage to businesses located in their state over similar businesses located in other states. It has been nearly nine years and this law has gone unchallenged; however, I expect that eventually the Statute will be challenged at the Federal level and ultimately need to be repealed by Massachusetts.?

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