Arkansas gambling winnings are fully taxable and should be reported on the Arkansas tax return unless they are specifically from electronic games of skill. The Arkansas program will prompt to enter gambling income as Other Income when the Arkansas state return is created. (Income > Other Income > Gambling Winnings).
Winnings from electronic games of skill are assessed a 3% flat tax. The winnings and tax are not included on the individual Arkansas tax return as income or withholding.
To specify the source of gambling winnings as electronic games of skill, from the main menu of the federal tax return select:
- Income
- Other Income
- Gambling Income (W2-G) - Select New, then enter all required information, including the Arkansas winnings and tax withheld. Upon exiting the W2-G entry window, you will be asked "Are winnings from Arkansas electronic game of skill?". Select Yes if so.
To revisit this question to check your answer, from the main menu of the federal tax return select:
- Income
- Other Income
- Gambling Income (W2-G)
- Local / Other Information
- Winnings are from Arkansas Electronic Game of Skill
Additional Information: