<<I have read some sources that say getting withholdings back from states like Indiana is difficult and nearly impossible for a casual gambler.>>
This is a true statement. Even filing as professional gamblers on our federal return for 10 years, Indiana gave us a very difficult time when we tried to get back most of the Indiana tax withheld on two trips to the Horseshoe Casino in Hammond, IN in 2009. We finally succeeded in getting back most of the $10,000 withheld but it took a lot of letters and phone calls. (And although we want to play there again, we need to decide whether we want to go through these tax fights again!!! One is wise to consider tax implications before choosing a play!)
The problem for the casual gambler in IN - and many other states, especially in the Midwest - is that they use the gross win figure, just like the feds do but they do NOT have a line on their state form for gross losses. (The professional who files federal Schedule C can carry over just the NET win to the IN state form.)
For those of you who play or plan to play in states that withhold state income taxes - or in the case of MS which they call a state gambling tax - you might want to get the book "Tax Help for Gamblers." There is a whole chapter on state taxes, including a list of all 50 states and how each handle gambling issues. I also discuss in details the special situation in MS.
You can order the hard copy at my Web site below. You can also order it on the Las Vegas Advisor site, where it is also offered as an inexpensive e-Book.
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Jean $�ott, Frugal Gambler
http://queenofcomps.com/
You can read my blog at
http://jscott.lvablog.com/