West Virginia Tax Division Revises Gambling Withholding, Loss Deduction Guidelines
West Virginia updated its tax guidelines to require 4.58% backup withholding on gambling winnings when federal withholding applies.Summary
The West Virginia Tax Division has issued revised guidance regarding gambling withholding requirements and loss deductions for state tax purposes. The new rules establish that West Virginia mandates a 4.58 percent backup withholding rate on gambling winnings when federal backup withholding is applicable. Specific triggers for this requirement include a taxpayer's failure to provide proper identification verification and winnings that meet federal withholding thresholds. Additionally, the guidance clarifies that taxpayers may claim a decreasing modification for West Virginia gambling losses against West Virginia gambling income. This deduction is permitted provided that losses do not exceed reported gambling income and that proper documentation is maintained, such as federal returns, W-2G forms, or online platform account summaries. The guidance is documented as West Virginia Tax Division, TSD 432, dated June 1, 2026.
(Source：Bloomberg Tax News)