On March 28, 2025, Governor Kim Reynolds signed Iowa Senate File 605. The Iowa Department of Revenue has released new tax guidance to explain this tax update:
- Income Tax Withholdings on Winnings from Sports Wagering
Iowa Code provides regulation on gambling games and sports wagering, defined as the acceptance of wagers on an authorized sporting event or sports-related event by any system of wagering as authorized by the commission. This bill requires taxes to be withheld from winnings from sports wagering in circumstances when federal income tax is withheld from those winnings. The new law is effective January 1, 2026.
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