Pennsylvania Form PA-40 Schedule T is the Gambling and Lottery Winnings schedule that every Pennsylvania resident, part-year resident, and nonresident must attach to their PA-40 Personal Income Tax Return when they have any reportable gambling, betting, sweepstakes, or Pennsylvania Lottery cash prize income for the tax year. The form converts each W-2G, casino win, sportsbook payout, raffle prize, and PA Lottery cash prize into a single taxable figure that flows to Line 8 of the PA-40 personal income tax return and is taxed at Pennsylvania’s flat 3.07% rate under 72 P.S. § 7303(a)(7).
The 2025 tax year version (filed in 2026) is the current revision, and the form has only one page with two parts — Part I for winnings and Part II for costs related to the winnings. Filing volume matters: the Pennsylvania Department of Revenue processed over 6.4 million PA-40 returns in the prior filing season, and gambling-related schedules are among the fastest-growing attachments because of the 2017 sports betting expansion and the surge in online casino play through licensed PA iGaming operators.
In this guide, you will learn:
- 🎰 What PA-40 Schedule T is, who must file it, and what counts as a “winning” under Pennsylvania law
- 📄 Every line, box, and signature requirement on the 2025 Schedule T, with sample entries
- 🧾 Three full-walkthrough scenarios using named filers (resident slot winner, lottery jackpot recipient, nonresident sports bettor)
- 🚫 The 10 most common Schedule T mistakes that trigger notices, holds, and assessments
- ✅ How to file Schedule T by paper, through myPATH, or via Modernized e-File, and what proof to keep
What the Form Is and Who Must File It
Pennsylvania Form PA-40 Schedule T reports gambling and lottery winnings as a separate class of income under Pennsylvania’s eight-class personal income tax system. Pennsylvania does not use federal adjusted gross income as a starting point, so winnings cannot be netted with losses the way they can be on federal Schedule A itemized deductions. Each dollar of gross winnings is taxable at 3.07%, and the only offset allowed is the cost of the wager itself on the same winning ticket, hand, or bet.
You must file Schedule T if you are a Pennsylvania resident with any gambling or lottery winnings anywhere in the world, a part-year resident with winnings during the PA-residency portion of the year, or a nonresident with winnings from sources inside Pennsylvania. The Pennsylvania Lottery cash prize exclusion ended on January 1, 2016, when Act 84 of 2016 made all PA Lottery cash prizes fully taxable for state purposes. Noncash PA Lottery prizes (cars, vacations) are still excluded from PA tax, which is a quirk you must respect on Line 8 of the form.
Professional gamblers do not file Schedule T for their professional activity. Instead, professional gamblers report net profit on PA Schedule C as a sole proprietorship under the “net profits from a business” class. Casual or recreational gamblers — the vast majority of filers — use Schedule T. Misclassifying yourself triggers a class-of-income reallocation, interest, and often a penalty.
Federal interaction matters. The IRS taxes gambling winnings under IRC § 61 and requires payers to issue Form W-2G when winnings exceed certain thresholds ($1,200 slots/bingo, $1,500 keno, $5,000 poker tournaments, $600 and 300:1 odds for other wagers). Pennsylvania does not use these thresholds — every dollar of winnings is reportable on Schedule T even if no W-2G was issued.
Before You Start: Documents and Information You Need
Gathering paperwork before opening Schedule T saves rework, prevents Department of Revenue notices, and makes the line-by-line entry quick. The official PA-40 instructions booklet lists the supporting documents the agency may request on audit, and the Schedule T instructions PDF tells you exactly what to keep.
Pre-filing checklist (minimum eight items, each explained):
- All Federal Forms W-2G — these show gross winnings, federal withholding, and the type of wager. Without them, you cannot verify the Box 1 amounts the casino reported to the IRS, and a mismatch triggers a federal/state cross-match notice.
- Casino or sportsbook annual win/loss statements — every licensed PA operator (FanDuel, DraftKings, BetMGM, Hollywood Casino, Parx) issues one. The statement reconciles small winnings that fell below W-2G thresholds, and missing this document is the most common reason filers underreport Line 1.
- Pennsylvania Lottery winner statements or 1099-MISC — the PA Lottery issues a 1099-MISC for cash prizes of $600 or more. You need it to separate cash prizes (taxable) from noncash prizes (not taxable for PA).
- Out-of-state casino documentation — if you are a PA resident who won in Atlantic City, Las Vegas, or any tribal casino, you need those W-2Gs because PA taxes worldwide winnings of residents.
- Social Security number for you and your spouse — Schedule T is filed by name and SSN, and a wrong digit causes the form to be rejected from automated processing.
- Prior year PA-40 — you need it to confirm filing status, residency status, and any carryover gambling-related estimated payments.
- Proof of wagering costs — losing tickets, bet slips, electronic wagering ledgers, and casino rated-play reports. PA only allows the cost of the winning wager, but documentation is still vital if the Department questions Line 2.
- Form 5754 — if you were part of a winning group (office lottery pool, syndicate), the IRS Form 5754 divides the winnings among members. Without it, the entire prize is attributed to the single name on the W-2G.
- Bank records of winnings deposits — for online sportsbook and casino withdrawals, the deposit amounts corroborate Line 1.
- Estimated payment confirmations — if you made PA-40ES payments after a large win, gather the confirmation numbers.
Have these documents in a single folder before you write a single number on Schedule T.
Where to Get the Form and How to Access It
The official 2025 PA-40 Schedule T is available as a fillable PDF on the Pennsylvania Department of Revenue forms page. Always download from revenue.pa.gov rather than third-party sites because revisions happen mid-season and outdated versions are rejected by the Department’s scanner.
You can also retrieve Schedule T inside myPATH, Pennsylvania’s free online filing portal, where the schedule auto-populates from Form W-2G entries you upload. Most paid software products — TurboTax, H&R Block, TaxAct, and Drake — generate Schedule T automatically once you enter gambling income on the federal side, but you must verify each line because the federal and PA treatments differ.
Paper filers can also order the form by calling the Department of Revenue’s forms line at 1-800-362-2050 or by visiting any Department of Revenue district office. Public libraries across the state stock the most-requested forms during filing season, and most accept printed-on-demand requests at no cost.
The revision date printed at the bottom of the 2025 form is PA-40 T (EX) MOD 06-25. If your downloaded PDF shows a different revision code, replace it before filing. The Department rejects old revisions because the OCR (optical character recognition) layout changes between revisions, and an old form will not scan correctly.
When you open the fillable PDF, enable Adobe Acrobat Reader’s “Highlight Existing Fields” option so every blank box is visible. Save your work often. The fillable PDF does not autosave, and a browser crash erases entries.
Step-by-Step: How to Fill Out PA-40 Schedule T Line by Line
Schedule T has a header block (taxpayer identification), Part I (Total Winnings), Part II (Costs), and a final taxable figure. Every field below gets its own walkthrough.
Header — Name(s) Shown First on the PA-40
What this field asks in plain English. Print the name(s) exactly as they appear on the front of your PA-40, in the same order. If you file jointly, the primary taxpayer goes first, and the spouse goes second.
How to answer it. Use ALL CAPS, last name first if the official PA-40 uses that order, and match every character including hyphens and apostrophes. Do not abbreviate.
A specific example answer. Maria Lopez and her husband Carlos file jointly; she enters LOPEZ MARIA J & CARLOS R in the name block.
A nuance or edge case. If you changed your name after marriage but the W-2G still has your maiden name, use your current legal name on Schedule T and explain the prior name in a written statement attached behind Schedule T.
A common mistake on this field and its direct consequence. Filers reverse the order of joint names from how they appear on the PA-40, which causes the schedule to be unmatched to the return during processing and the gambling income to be added a second time as an “unmatched schedule.”
A misconception people hold about this field. Some filers think the schedule is keyed by SSN alone and skip the name. The Department’s scanner uses both name and SSN to match, and an empty name block bounces the form to manual review.
Header — Social Security Number
What this field asks in plain English. Enter the SSN of the primary taxpayer named first on the PA-40.
How to answer it. Write nine digits in the format 123-45-6789, including the dashes preprinted on the form. Do not use the spouse’s SSN even if only the spouse had winnings.
A specific example answer. Maria’s SSN appears as 198-45-7732 in the SSN block.
A nuance or edge case. If your spouse alone had winnings and you file jointly, use the primary filer’s SSN here and identify the actual winner inside the supporting W-2G copies.
A common mistake on this field and its direct consequence. Transposing two digits causes the schedule to be unlinked from the PA-40, and the Department issues a Notice of Adjustment within 8–12 weeks adding the winnings as unreported income.
A misconception people hold about this field. Filers think they can use an ITIN where an SSN is required. ITINs are accepted on the PA-40 itself, but the matching process for Schedule T runs against SSNs first, so a clear written notation that an ITIN is in use is needed.
Part I, Line 1 — Total Winnings
What this field asks in plain English. Enter the gross amount of all gambling and PA Lottery cash winnings from every source for the entire tax year.
How to answer it. Add together every Box 1 amount from every Federal Form W-2G, every casino win/loss statement winnings figure, every sportsbook annual statement, every 1099-MISC from the PA Lottery, every raffle prize, and every cash prize from a contest of chance. Round to whole dollars (no cents). Enter the total in the box, right-justified.
A specific example answer. Maria received three W-2Gs totaling $12,400, a PA Lottery 1099-MISC for $1,000, and her DraftKings annual statement shows $3,217 in net winning sessions. She enters 16617 on Line 1.
A nuance or edge case. Noncash prizes (a car, a cruise, electronics) follow PA’s noncash rule. Pennsylvania excludes noncash PA Lottery prizes entirely but includes noncash prizes from any other source at fair market value on the date of the win. If Maria won a $30,000 boat from a Cabela’s raffle, the $30,000 belongs on Line 1; if she won the same boat in a PA Lottery draw, it does not.
A common mistake on this field and its direct consequence. Filers net losses against winnings the way they would for federal Schedule A. Pennsylvania does not allow loss netting on Schedule T (only the cost of the winning wager counts as a Part II cost). Netting losses understates Line 1 and produces an assessment plus the 3% per year interest rate the Department charges.
A misconception people hold about this field. Many casual gamblers believe winnings under the W-2G threshold are not taxable. That is false for Pennsylvania. Every dollar of winnings is reportable on Line 1 even if no W-2G was issued.
Part II, Line 2 — Costs (Wagers on Winning Tickets Only)
What this field asks in plain English. Enter the cost of the wagers that produced the winnings listed on Line 1 — and only those wagers.
How to answer it. Add the amount staked on each winning bet, ticket, hand, or pull. Do not include losing tickets, losing pulls, or wagers that produced no payout. Round to whole dollars and enter the figure right-justified.
A specific example answer. Maria’s $12,400 in slot W-2Gs came from three jackpot pulls of $1, $5, and $5. Her $1,000 PA Lottery prize came from a $5 ticket. Her DraftKings $3,217 came from $412 in winning bet stakes. She enters 423 on Line 2.
A nuance or edge case. For slot machines, the “cost of the winning wager” is the amount played on the single winning spin, not the entire session bankroll. The PA Personal Income Tax Guide chapter on gambling treats each spin as a separate wager.
A common mistake on this field and its direct consequence. Filers add an entire day’s losses, an entire week’s bets, or the full amount funded into a sportsbook account. Doing this overstates Line 2, understates taxable winnings, and is one of the top three audit triggers on Schedule T because the Department compares Line 2 to the W-2G stake data when available.
A misconception people hold about this field. People think gambling losses are deductible against winnings on Schedule T. They are not. Only the cost of the winning wager counts.
Line 3 — Total Winnings (Subtract Line 2 from Line 1)
What this field asks in plain English. Subtract the wagering costs on Line 2 from the gross winnings on Line 1, and enter the result.
How to answer it. Do the math: Line 1 minus Line 2 equals Line 3. If Line 2 is greater than Line 1 (rare, only when costs of the winning wagers were unusually large), enter zero — Schedule T cannot produce a loss.
A specific example answer. Maria computes 16,617 − 423 = 16,194 and enters 16194 on Line 3.
A nuance or edge case. Line 3 carries to Line 8 of Form PA-40, the gambling and lottery income line. If you file jointly and both spouses had winnings, you still file one Schedule T with the combined totals, because Pennsylvania does not split classes of income between joint filers on a single return.
A common mistake on this field and its direct consequence. Filers forget to copy Line 3 onto PA-40 Line 8, leaving Line 8 blank. The Department’s automated cross-check between Schedule T and the PA-40 catches the mismatch and issues a corrected balance due, often with an underpayment penalty.
A misconception people hold about this field. Some believe Line 3 also affects the local Earned Income Tax (EIT) collected by PA local tax collectors. Gambling winnings are not subject to local EIT in Pennsylvania, so Line 3 affects only state tax.
Signature Block
PA-40 Schedule T does not have its own signature line; it is signed by the act of signing the PA-40 itself. The signature on Page 2 of the PA-40 attests under penalty of perjury that Schedule T is accurate.
What this means in plain English. Signing the PA-40 also signs every attached schedule, including Schedule T.
How to answer it. Sign and date the PA-40 in blue or black ink if filing on paper. If filing through myPATH or e-file software, the electronic signature PIN you create at submission covers Schedule T.
A specific example. Maria signs her PA-40 on April 10, 2026; that signature covers her Schedule T entries.
A nuance or edge case. A joint return requires both spouses’ signatures. If only one spouse signs, the return is treated as unsigned and Schedule T is not processed.
A common mistake and its consequence. Filing Schedule T without an attached, signed PA-40. The Department returns the schedule unprocessed and the original PA-40 deadline still applies, often causing late-filing penalties under 72 P.S. § 7352.
A misconception. Some filers think e-file removes the signature requirement. The PIN is the signature, and an unsubmitted PIN means an unsigned return.
Three Filled-Out Examples Using Real Scenarios
Each scenario follows one named person from start to finish.
Scenario 1 — Maria Lopez, PA Resident, Slot Jackpot at Hollywood Casino
Maria, age 47, lives in Harrisburg and won a $10,000 slot jackpot at Hollywood Casino at Penn National in March 2025. She also had $2,400 in smaller W-2G slot wins and $4,217 from DraftKings sports bets.
| Form Section | What Maria Enters |
|---|---|
| Name(s) shown first on PA-40 | LOPEZ MARIA J & CARLOS R |
| Social Security Number | 198-45-7732 |
| Part I, Line 1 — Total Winnings | 16617 |
| Source 1 — Hollywood Casino W-2G | 10000 (included in Line 1) |
| Source 2 — Other PA casino W-2Gs | 2400 (included in Line 1) |
| Source 3 — DraftKings annual statement | 3217 (included in Line 1) |
| Source 4 — PA Lottery 1099-MISC | 1000 (included in Line 1) |
| Part II, Line 2 — Costs of Winning Wagers | 423 |
| Line 3 — Total Winnings (Line 1 minus Line 2) | 16194 |
| Carried to PA-40 Line 8 | 16194 |
Maria attaches her three W-2Gs and her DraftKings annual statement behind Schedule T.
Scenario 2 — Marcus Johnson, PA Resident, $250,000 Cash 5 Lottery Jackpot
Marcus, age 35, lives in Pittsburgh and won a $250,000 PA Lottery Cash 5 jackpot in July 2025. He had no other gambling activity. The PA Lottery withheld 3.07% PA tax and 24% federal tax at the cage, and issued a W-2G for the federal portion and a 1099-MISC for state purposes.
| Form Section | What Marcus Enters |
|---|---|
| Name(s) shown first on PA-40 | JOHNSON MARCUS T |
| Social Security Number | 224-90-1145 |
| Part I, Line 1 — Total Winnings | 250000 |
| Source — PA Lottery Cash 5 jackpot | 250000 (included in Line 1) |
| Part II, Line 2 — Costs of Winning Wagers | 2 |
| Line 3 — Total Winnings | 249998 |
| PA tax already withheld on Line 13 of PA-40 | 7675 |
| Carried to PA-40 Line 8 | 249998 |
Marcus attaches his PA Lottery 1099-MISC and the W-2G behind Schedule T.
Scenario 3 — Aisha Rahman, Nonresident, FanDuel Sportsbook Winnings in PA
Aisha, age 29, lives in New Jersey and visits Philadelphia for work. She placed sports bets through FanDuel Sportsbook while geo-located inside Pennsylvania during 2025 and won $7,800 net. She files a PA-40 for nonresidents reporting only PA-source income.
| Form Section | What Aisha Enters |
|---|---|
| Name(s) shown first on PA-40 | RAHMAN AISHA K |
| Social Security Number | 147-22-9087 |
| Residency status on PA-40 | Nonresident |
| Part I, Line 1 — Total Winnings (PA-source only) | 7800 |
| Source — FanDuel PA-geolocated bets | 7800 (included in Line 1) |
| Part II, Line 2 — Costs of Winning Wagers | 612 |
| Line 3 — Total Winnings | 7188 |
| Carried to PA-40 Line 8 | 7188 |
| New Jersey credit for taxes paid to PA on NJ-1040 | Computed separately |
Aisha files PA-40 as a nonresident and claims a credit on her New Jersey NJ-1040 for the PA tax paid, avoiding double taxation.
How to File the Completed Form
Schedule T is filed with the PA-40, never alone. Pennsylvania accepts four filing channels.
myPATH (online portal). File free at mypath.pa.gov. The portal walks you through each line, validates your math, and uploads W-2G PDFs as attachments. There is no fee. Acknowledgment is immediate, and the Department of Revenue’s processing timeline for myPATH returns is 4–6 weeks for refunds. Save the confirmation number as proof of filing.
Modernized e-File (paid software). Commercial software submits Schedule T as part of the PA-40 e-file package. Fees vary by product (TurboTax, H&R Block, TaxAct, FreeTaxUSA). Acknowledgment arrives within 24–48 hours. Refund processing is 4–6 weeks, the same as myPATH. Keep the IRS-issued submission ID and the PA acknowledgment.
Paper filing by mail. Mail the signed PA-40, Schedule T, and copies of all W-2Gs and 1099-MISCs to the address that matches your filing position:
- Refund or no payment: PA Department of Revenue, Refund/Credit Requested, 3 Revenue Place, Harrisburg, PA 17129-0003
- Payment enclosed: PA Department of Revenue, Payment Enclosed, 1 Revenue Place, Harrisburg, PA 17129-0001
- Balance due, no payment: PA Department of Revenue, No Payment/No Refund, 2 Revenue Place, Harrisburg, PA 17129-0002
Use USPS Certified Mail with Return Receipt so you have proof of mailing on or before April 15, 2026. Paper processing runs 8–12 weeks.
In person. Bring the signed PA-40 and Schedule T to a Department of Revenue district office. Office staff stamp your copy as proof of timely filing but do not review the math. There is no filing fee.
For payment, the Department accepts ACH debit (free), credit card (third-party fee around 2.49%), check, and money order through any of these channels. Estimated payments for the next year on PA-40ES are due quarterly on April 15, June 15, September 15, and January 15.
What Happens After You File
After Schedule T is received, the Department’s automated processing system matches Line 1 against W-2G data the IRS shares with PA under the federal-state information sharing program. When figures match, the return moves to refund release or balance-due posting.
If figures do not match, you receive a Notice of Adjustment within 8–12 weeks. The notice lists each W-2G the Department has on record, the amount you reported, and the proposed change. You have 60 days to respond with documentation, after which the assessment becomes final under 72 P.S. § 7341.
Refunds attributable to over-withholding on lottery prizes are paid by direct deposit (5–7 business days after release) or paper check (2–3 weeks). You can track refund status at revenue.pa.gov refund tracker.
If the Department later opens a Schedule T audit, expect a request for every W-2G, 1099-MISC, casino win/loss statement, and bank statement showing gambling deposits and withdrawals for the year. Keep these records for at least four years from the filing date, the period covered by 72 P.S. § 7407.4 statute of limitations.
Mistakes to Avoid When Filling Out the Form
The Department’s published audit data and field experience point to the following ten mistakes more than any others.
- Netting losses against winnings on Line 1. Pennsylvania does not allow this; the assessment plus interest follows automatically.
- Including noncash PA Lottery prizes on Line 1. Noncash PA Lottery prizes are excluded; including them overpays tax.
- Excluding cash PA Lottery prizes won after January 1, 2016. Many filers still believe PA Lottery cash is exempt; Act 84 of 2016 ended that.
- Putting an entire week’s wagers on Line 2. Only winning-wager costs go on Line 2; the rest produces an audit.
- Forgetting to carry Line 3 to PA-40 Line 8. A blank Line 8 triggers a corrected balance due notice.
- Filing Schedule T without W-2G copies attached. Paper returns without W-2G attachments are sent to manual review and delay refunds.
- Using the prior year’s revision of Schedule T. OCR layout changes between revisions, and old forms are rejected.
- Reporting only what was on a W-2G. Sub-threshold winnings (under $1,200 slots, under $600 lottery) still belong on Line 1.
- Mixing professional gambling income on Schedule T. Professional gamblers report on Schedule C, not Schedule T.
- Failing to file as a nonresident on PA-source winnings. Out-of-state visitors who win in PA must file PA-40 with Schedule T as nonresidents.
Each error has a direct, measurable consequence — assessment, interest, or rejection — so checking your work against this list before submission is the single highest-value review step.
Do’s and Don’ts
Do’s:
- Do report every dollar of winnings, even sub-W-2G amounts, because PA has no de minimis threshold.
- Do attach copies of every W-2G and 1099-MISC behind Schedule T on a paper return so the Department can match figures fast.
- Do download the form fresh from revenue.pa.gov every year because revisions change OCR layout.
- Do keep your casino win/loss statement and electronic wagering ledger for four years to defend Line 1 and Line 2 on audit.
- Do file by April 15, 2026 (or request a PA REV-276 extension) to avoid a late-filing penalty equal to 5% per month of unpaid tax.
- Do make a PA-40ES estimated payment within the quarter of a large win to avoid the underpayment penalty.
Don’ts:
- Don’t deduct losing tickets on Schedule T; PA does not follow the federal Schedule A approach.
- Don’t use one Schedule T per spouse on a joint return; combine totals on a single Schedule T.
- Don’t copy figures from the federal Schedule 1 directly to Line 1; federal and PA treatment differ on noncash lottery prizes and professional gambling.
- Don’t enter cents on any line; PA-40 schedules use whole dollars.
- Don’t skip Schedule T because federal tax was withheld at the casino; PA tax is separate.
- Don’t file Schedule T without a signed PA-40; the schedule is unprocessable on its own.
Pros and Cons of Filing on Your Own vs. With Help
Pros of filing Schedule T yourself:
- Cost savings — myPATH is free and tax software runs $0–$60.
- Speed — e-filed returns process in 4–6 weeks versus 8–12 for paper.
- Control — you see every line and decide what supporting documentation to retain.
- Privacy — no third party touches your gambling records.
- Confidence — Schedule T is a one-page form, and most filers complete it in under 30 minutes once documents are gathered.
Cons of filing Schedule T yourself:
- Misclassification risk — confusing professional vs. casual status creates a multi-year exposure.
- Loss-netting trap — DIY filers commonly net losses against winnings without realizing PA disallows it.
- Recordkeeping burden — you alone are responsible for four years of supporting documents.
- Estimated payment errors — large winners often miss the quarterly estimated payment deadline.
- Multi-state complications — if you won outside PA or live outside PA, the credit-for-taxes-paid calculation is easy to get wrong.
For winnings over $50,000, multi-state activity, or any professional-vs-casual ambiguity, hire a PA-licensed CPA or an enrolled agent. The fee ($300–$1,000) is far smaller than a typical Schedule T assessment with interest and penalty.
Schedule T vs. Federal Schedule 1 — Treatment Differences That Matter
| Topic | Pennsylvania Schedule T |
|---|---|
| Loss netting against winnings | Not allowed (only winning-wager cost on Line 2) |
| PA Lottery cash prizes | Taxable since 1/1/2016 |
| PA Lottery noncash prizes | Excluded |
| Out-of-state casino winnings (resident) | Taxable on Line 1 |
| Out-of-state casino winnings (nonresident) | Not reported on PA-40 |
| Professional gambling | Schedule C, not Schedule T |
| Tax rate | Flat 3.07% |
FAQs
Do I file Schedule T if I had only $200 in winnings and no W-2G?
Yes. Pennsylvania has no de minimis threshold; any winnings, no matter how small, must appear on Line 1 of Schedule T and flow to PA-40 Line 8.
Are PA Lottery cash prizes taxable in 2025?
Yes. Act 84 of 2016 ended the PA Lottery cash prize exclusion, so all cash prizes won on or after January 1, 2016 are fully taxable on Schedule T at 3.07%.
Can I deduct my losing tickets on Schedule T?
No. Pennsylvania allows only the cost of the winning wager on Line 2, not aggregate losses, unlike federal Schedule A itemized treatment.
Do nonresidents file Schedule T for PA casino winnings?
Yes. Nonresidents who win at PA casinos, sportsbooks, or PA-geolocated online operators must file PA-40 as nonresidents with Schedule T reporting the PA-source winnings.
Does Pennsylvania tax noncash PA Lottery prizes like cars or vacations?
No. Pennsylvania excludes noncash PA Lottery prizes from Schedule T income, even though federal law taxes them at fair market value.
Do I write the W-2G Box 1 amount or Box 4 amount on Line 1?
Yes — use Box 1 (gross winnings); Box 4 is federal income tax withheld and goes on the federal return, not on PA Schedule T.
Can I claim my winning ticket cost on Line 2 if it was a $1 PA Lottery scratcher?
Yes. A $1 winning ticket cost is a valid Line 2 entry; round to whole dollars (enter 1).
Should I file one Schedule T per spouse on a joint return?
No. A joint PA-40 takes one combined Schedule T listing both spouses’ winnings and costs together.
Do I need to attach my federal Form W-2G to a paper PA-40?
Yes. Paper filers must attach copies of every W-2G and 1099-MISC behind Schedule T so the Department can match the figures during processing.
Is my professional poker tournament income reported on Schedule T?
No. Professional gamblers report on PA Schedule C as a trade or business; Schedule T is only for casual gambling and lottery winnings.
What if my W-2G has my maiden name but I now file under my married name?
Yes — use your current legal married name on Schedule T; attach a brief statement explaining the prior name on the W-2G to prevent a name-mismatch hold.
Can I net my $5,000 sportsbook losses against my $7,000 sportsbook winnings on Line 1?
No. Pennsylvania disallows session-based netting on Schedule T; Line 1 must show $7,000 gross winnings, with only the cost of the winning wagers on Line 2.
Do I owe local Earned Income Tax on my gambling winnings?
No. Pennsylvania local EIT does not apply to gambling and lottery winnings; only the state 3.07% applies through Schedule T and PA-40 Line 8.
If my casino withheld 3.07% PA tax on a jackpot, do I still file Schedule T?
Yes. Withholding does not replace filing; Schedule T reports the gross winnings and the withheld tax appears on PA-40 Line 13 as a credit toward the final liability.
Related reading
- How to Fill Out Pennsylvania Form PA-40 Schedule A (w/Examples) + FAQs
- How to Fill Out Pennsylvania Form PA-40 Schedule D (w/Examples) + FAQs
- How to Fill Out Pennsylvania Form PA-40 Schedule SP (w/Examples) + FAQs
- How to Fill Out Pennsylvania Form PA-40 Schedule W-2S (w/Examples) + FAQs
- How to Fill Out Pennsylvania Form PA-40 X (w/Examples) + FAQs
- How to Fill Out Pennsylvania Form PA-W3 (w/Examples) + FAQs