Pennsylvania law imposes income tax on Pennsylvania residents on all gambling and lottery winnings from any source, except prizes from playing the Pennsylvania State Lottery. As a Pennsylvania resident, you must include lottery winnings from other states and countries.

Gambling and lottery winnings include cash, the value of property (automobiles, jewelry, electronic devices, appliances, clothes, etc.), the value of the use of property (trips, vacations, airline tickets, cruises, etc.), and other items of value. You may only deduct your costs of gambling, wagering, betting, and playing lotteries from your winnings. You may not deduct any expenses (programs, tip sheets, travel, meals, lodging, etc.) that you incurred to take part in gambling, wagering, betting, and lottery activities.

IMPORTANT: You may not deduct the cost of PA State Lottery tickets from other PA taxable gambling and lottery winnings.

For more information, see the PA-40 instructions.