WV Betting Losses Can be Deducted Through State Taxation statements

West Virginia just got much more friendly to online gamblers. The state passed a new law that changes how West Virginians include gambling expenses in their taxes.

The law allows West Virginia bettors to deduct gambling losses from their winnings before they file state taxes.

In theory, this might sound great for West Virginia gamblers, and it is. However, there are a few details you should keep in mind if you intend to take advantage of the new rule. Let’s dive in.

WV’ s brand new gambling taxes rule: things to know

Formerly, West Virginia taxed gamblers on their gross winnings, which was a less favorable framework than the new rule puts forth. Now, gamblers in WV can deduct losses from their winnings as long as they meet a few criteria.

First, losses can only be deducted if they occur in West Virginia. In other words, you can’t deduct losses incurred in any other legal gambling state if you’ve gambled there while traveling.

Second, the losses you report can’t exceed your winnings. If you break even during a year, you won’t have to pay taxes on winnings because your losses offset taxable winnings.

Third, there’s no need to itemize your deductions. You can still deduct gambling losses while claiming the standard tax deduction.

Finally, you can only deduct losses from legal and regulated gambling platforms. WV Lottery, gambling sites, racetracks, and casinos all qualify.

How to get the particular WV betting loss deductions

To conciliate the IRS when you file your West Virginia state taxes, you have to keep detailed records of your gambling earnings and losses. This lets you substantiate the losses and winnings you claim. Keep track of your wins and losses so you can easily include them when you file your tax returns.

Most online tax tools (such as TurboTax) include questions about gambling earnings and losses. If you use a tax software, it should help walk you through the process. If you have an accountant or hire someone to do your taxes, be sure to give them your records so they can properly deduct the losses.

Note that the deduction is available only for state tax returns. It doesn’t affect your federal tax filing.

You can change older results

The new legislation allows bettors to amend tax returns for 2020, 2021, and 2022, according to Lexology.com:

“[HB 2821] allows individuals to amend returns filed for 2020, 2021, and 2022 to account for the decreasing modification.”

Amending your returns to account for the new rule may help you save some money. Of course, this depends on having records to substantiate your deductions. If you don’t have proof, you won’t be able to amend your previous returns but can claim the deductions going forward.

What can we learn from this for bettors?

Generally speaking, the new rule is good for gamblers, making West Virginia more friendly to residents who partake in any form of regulated gambling. Whether the new law has a significant impact on you depends on what kind of gambler you are. Seasoned gamblers who gamble a lot may benefit the most. Casual bettors who only place a few bets on major events like the Super Bowl or March Madness probably won’t feel the law’s effect.

In West Virginia, gambling operators are taxed, and the money generated is used for various state- and community-wide improvement initiatives. The state stands to gain a lot by allowing legal gambling channels. Players who use these channels contribute tax revenue by participating. Giving them a break on their personal taxes is a no-brainer. Players may be more likely to play at WV online gambling sites and establishments, generating more revenue (and tax contributions) for operators, the lottery, casinos, and racetracks.