I won at a casino in another state. I paid the tax there. Now saying I owe $890 in their state taxes. I won $2000, paid $500 right away. Why do I owe the state so much ?

[SteamTrain]

$500 on a $2000 winning, sounds like a total combination of Federal Plus state taxes (unless it was really 500 on 20,000 winning) ...so how much was the state tax amount on the W-2G?

Anyhow.....it still depends on what state is involved...I don't really know the details, but at least one state withholds state taxes on the winnings at the casino, and you are done.....and you don't bother filing a state tax return at all (unless you had other sources of income in that non-resident state).   Other states do require a state tax return being filled out because the actual % they charge depends on how much income you have for the entire year.

Still, $890 is too much no matter what.   I suspect that you haven't gone thru the full state interview yet, and because you may not have done that yet, state taxes are being applied to ALL of your income and not just the winnings.  You need to do that full nonresident state interview because that "state" interview will ask you indicate what sub-portions of Federal income were earned in that casino state...and you need to set all other income types to a zero in that Non-resident state interview...except for the $2000 won.

.....make sure the entire Federal section is filled in first...every scrap, including the W2G from the casino and the tax withholding done for Federal and state showing on that form.

[Anonymous]

you may have done your state returns backward.  TT advises always doing the non-resident state first so you only pick up the non-resident income than the resident state so you get the proper credit for taxes paid to the other state which is based on the actual tax liability in the non-resident state not the amount of taxes withheld.