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Gambling tax calculator for 2026 (the 90% loss rule)
Figures checked against the sources below on September 27, 2026Awaiting professional review
For tax years beginning after December 31, 2025, you can deduct only 90% of your gambling losses, and never more than your gambling winnings, under IRC section 165(d) as amended by section 70114 of Public Law 119-21, signed July 4, 2025. Win $100,000 and lose $100,000 in 2026: you deduct $90,000 and pay tax on $10,000 of phantom income.
Gambling winnings are ordinary income, taxed at your federal marginal rate of 10% to 37% for 2026 [4], plus state income tax in most states (see the state section below). Enter the year's totals below to see deductible losses, taxable gambling income, phantom income and an estimate of the federal tax, with the same year under the 2025 rule beside it.
The 2026 standard deduction for a single filer is $16,100. Gambling losses are an itemized deduction, so they count only if your Schedule A total, losses included, beats that figure. The bracket table under the calculator shows where each 2026 rate begins.
Same year under the 2025 rule (100% of losses)
The 90% rule costs this filer about $2,400 more than the same year would have cost in 2025.
On $100,000 won and $100,000 lost in 2026, filing single and itemizing, $90,000 of losses is deductible, $10,000 is taxable gambling income and the estimated federal tax is $2,400 at a 24% marginal rate.
A single-year federal estimate. The tax line multiplies taxable gambling income by the one rate you picked, so it overstates when the income straddles two brackets and ignores credits, the net investment income tax and state rules that differ from federal. Automated bookkeeping, not tax advice; a licensed CPA or enrolled agent should review before filing.
The totals above are only as good as the documents behind them. W2gMatch reads your W-2Gs, win/loss statements and IRS transcript and ties them together.
Prefer to watch? A high roller breaks even and still owes
How much of my gambling losses can I deduct in 2026?
90% of them, and never more than your winnings. Section 165(d)(1) of the Internal Revenue Code now reads that the deduction for wagering losses “(A) shall be equal to 90 percent of the amount of such losses during such taxable year, and (B) shall be allowed only to the extent of the gains from such transactions during such taxable year.” [1] The amendment was made by section 70114 of Public Law 119-21, the One Big Beautiful Bill Act, signed July 4, 2025, and applies to taxable years beginning after December 31, 2025. [1] [2]
The arithmetic is two steps, in this order:
- Take 90% of the year's total losses.
- If that figure is larger than the year's total winnings, cut it down to the winnings.
What is left is the deduction, taken on Schedule A as an itemized deduction. [3] Winnings are reported in full on Schedule 1 (Form 1040), line 8b, whether or not a Form W-2G arrived. Nothing about the winnings side changed; the haircut is on the loss side only.
Section 165(d)(2) adds that “losses from wagering transactions” includes “any deduction otherwise allowable under this chapter incurred in carrying on any wagering transaction,” so a professional gambler's travel, entry fees and other business expenses sit inside the same 90% limit. [1]
What is phantom income from gambling?
Phantom income is the 10% of gambling losses that the 2026 rule no longer lets you deduct, so a break-even year is taxed as a winning one. The word is not in the statute; the arithmetic is. Win $100,000 and lose $100,000 in 2026: 90% of $100,000 is $90,000, which is under the $100,000 winnings cap, so $90,000 is deductible and $10,000 is taxable gambling income on a year in which nothing was kept. At a 32% marginal rate that is $3,200 of federal tax; at 24% it is $2,400. In 2025 the same year deducted $100,000 and owed $0.
The disallowed 10% does not carry forward and does not offset other income. The statute allows the deduction only for losses “during such taxable year,” and there is no carryover provision in section 165(d). [1] Our page on the 90% cap and the break-even guide go deeper on who it reaches.
What is the tax rate on gambling winnings in 2026?
There is no special rate. Gambling winnings are ordinary income, taxed in whichever federal bracket your total taxable income lands in, 10% to 37% for 2026. [3] [4] Most states tax them as well. [8] [9] A $5,000 win costs $600 of federal tax in the 12% bracket and $1,200 in the 24% bracket. The 2026 brackets, from IRS release IR-2025-103 (Rev. Proc. 2025-32), are: [4]
| Rate | Single | Married filing jointly |
|---|---|---|
| 10% | $12,400 or less | $24,800 or less |
| 12% | over $12,400 | over $24,800 |
| 22% | over $50,400 | over $100,800 |
| 24% | over $105,700 | over $211,400 |
| 32% | over $201,775 | over $403,550 |
| 35% | over $256,225 | over $512,450 |
| 37% | over $640,600 | over $768,700 |
Because winnings are added to your other income before the brackets are applied, a large jackpot can push part of the year into a higher bracket than your wages alone would reach. The calculator applies the one rate you pick to the whole taxable gambling figure, which is a fair estimate when the income stays inside a bracket and an overstatement when it straddles two.
Is the 24% withheld at the casino all the tax I owe?
No. The 24% is a prepayment, and most winners never have it taken at all. The IRS instructions for Form W-2G tell payers to “withhold at the 24% rate if the winnings minus the wager are more than $5,000 and are from: sweepstakes; wagering pools; lotteries,” parimutuel wagers paying at least 300 times the amount wagered, or “sports wagering and other wagering transactions, if the winnings are at least 300 times the amount wagered.” [5] The same instructions say plainly that “regular gambling withholding doesn't apply to winnings from bingo, keno, or slot machines.” [5] Backup withholding, when a winner will not supply a taxpayer identification number, is also 24%, and a payer who covers the tax on a noncash prize withholds 31.58% of the prize's value less the wager. [5]
Whatever was withheld shows in box 4 of the W-2G and is credited on your return like wages withholding. The return then settles the difference. A $6,000 sports win on a $10 wager has $1,437.60 withheld, because the 24% is figured on the winnings minus the wager ($5,990). [5] The tax actually due on the $6,000 is $720 in the 12% bracket (a $717.60 refund of the withholding), $1,440 in the 24% bracket ($2.40 more to pay) and $1,920 in the 32% bracket ($482.40 more to pay). A slot jackpot of the same size usually has nothing withheld, so the whole bill arrives at filing.
Worked examples in dollars
Each row is a 2026 tax year for a filer who itemizes. Deductible losses are 90% of losses, capped at winnings; taxable gambling income is winnings minus that figure; the tax column applies the stated marginal rate.
| Year | Deductible losses | Taxable gambling income | Federal tax | Same year in 2025 |
|---|---|---|---|---|
| Break-even: won $100,000, lost $100,000 | $90,000 | $10,000 (all phantom) | $2,400 at 24% | $0 taxable, $0 tax |
| Break-even: won $20,000, lost $20,000 | $18,000 | $2,000 (all phantom) | $440 at 22% | $0 taxable, $0 tax |
| Net winner: won $80,000, lost $75,000 | $67,500 | $12,500 ($5,000 real, $7,500 phantom) | $3,000 at 24% | $5,000 taxable, $1,200 tax |
| Net loser: won $100,000, lost $200,000 | $100,000 (90% is $180,000, capped) | $0 | $0 | $0 taxable, $0 tax |
| Small dollars: won $10,000, lost $9,900 | $8,910 | $1,090 ($100 real, $990 phantom) | $131 at 12% | $100 taxable, $12 tax |
The pattern: the 90% rule only bites when 90% of losses is below winnings, which is whenever losses are under about 111% of winnings. A heavy net loser is limited by the winnings cap first and sees no change. A player whose wins and losses are large and close together, the typical high-volume sports bettor or slot player with a big W-2G year, sees the most phantom income relative to any real profit.
One more case the calculator can show that a table cannot: the filer who does not itemize. Won $20,000, lost $15,000, single, 2026. Itemizing would allow $13,500 of losses (90% of $15,000), which is less than the $16,100 standard deduction, so unless other Schedule A items make up the gap the standard deduction wins and the deductible losses are, in effect, $0. Taxable gambling income stays $20,000. [4]
2025 vs 2026: what changed?
Your 2025 return, filed in 2026, is the last one under the old rule. The 2026 return, filed in early 2027, is the first under the new one. Two things moved at once: the loss deduction and the W-2G reporting threshold.
| Tax year 2025 | Tax year 2026 | |
|---|---|---|
| Share of losses deductible | 100% | 90% |
| Capped at winnings | Yes | Yes |
| Break-even year: taxable gambling income | $0 | 10% of losses |
| Unused losses carry forward | No | No |
| Must itemize on Schedule A | Yes | Yes |
| Standard deduction (single / MFJ / HoH) | $15,750 / $31,500 / $23,625 | $16,100 / $32,200 / $24,150 |
| Form W-2G threshold, slots and bingo | $1,200 | $2,000, adjusted yearly for inflation |
| Form W-2G threshold, keno | $1,500 | $2,000, adjusted yearly for inflation |
| Form W-2G, other wagers | $600 and 300 times the wager | $2,000 and 300 times the wager |
| Professional gamblers' business expenses | Inside the loss limit, deducted up to winnings | Inside the loss limit, so 90% and capped at winnings |
[1] [4] [5] [6] The reporting change matters less than it looks: a W-2G is the payer's report of one payout, not your winnings total, and winnings below the threshold are taxable all the same. [3]
Do I have to itemize to deduct gambling losses?
Yes. IRS Topic 419 states it directly: “You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040),” and “the amount of losses you deduct can't be more than the amount of gambling income you reported.” [3] Publication 529 places the deduction among the other itemized deductions on Schedule A and repeats that “you can't deduct gambling losses that are more than your winnings.” [7]
Itemizing only pays when the Schedule A total beats the standard deduction, which for 2026 is $16,100 for a single filer or married person filing separately, $32,200 married filing jointly and $24,150 head of household. [4] For 2025 the figures are $15,750, $31,500 and $23,625. [6] A casual player with a few thousand dollars of losses and no mortgage interest or state tax to itemize will usually take the standard deduction and deduct no losses at all, while reporting every dollar of winnings. The calculator's deductions switch shows both cases side by side. Our deduction page covers the edge cases.
What are the W-2G thresholds for 2026, and is the W-2G my winnings total?
“The minimum threshold amount for payments made in calendar year 2026 is $2,000,” and for calendar years after 2025 the threshold “will be adjusted yearly for inflation.” [5] That replaces the $1,200 slot and bingo figure and the $1,500 keno figure that applied to 2025 payments. The 300-times-the-wager test for sports bets, racing and lotteries still applies alongside the dollar figure. [5]
| Kind of wager | Payments in 2025 | Payments in 2026 |
|---|---|---|
| Slot machines and bingo | $1,200 | $2,000 |
| Keno | $1,500 (net of wager) | $2,000 |
| Sports betting, racing, lotteries, other wagers | $600 and at least 300 times the wager | $2,000 and at least 300 times the wager |
| Regular withholding | 24% above $5,000 on the 300x and lottery categories; none on slots, bingo, keno | unchanged |
A Form W-2G has boxes for reportable winnings (box 1), the date won (box 2), the type of wager (box 3) and federal tax withheld (box 4), and no box for losses. [5] It is one payout the payer had to report, not your result for the year. Topic 419 is blunt about the rest: “gambling winnings are fully taxable and you must report the income on your tax return,” W-2G or not. [3] To test one payout, use the W-2G threshold checker; for every product's rule, see the thresholds page.
What should I enter as winnings and losses?
Totals for the whole year, not the W-2G amounts. Winnings means every win, including the ones under the reporting threshold and the ones on sportsbook apps that never produce a form; losses means every losing wager. Topic 419 sets the standard of proof: “You must keep an accurate diary or similar record of your gambling winnings and losses and be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses.” [3] Publication 529 lists what the diary should hold: the date and type of wager, the name and location of the establishment, the people present and the amounts won or lost. [7]
For slot machine play, IRS guidance (Chief Counsel Advice AM 2008-011 and Notice 2015-21) describes a per-session approach in which each session's net result is a win or a loss, rather than every spin counted separately. [15] [16] Our session method page explains it. Keep the diary with the free session log template, and read why a casino win/loss statement alone is not enough before relying on one.
What about state tax?
Most states tax gambling winnings, and the states do not all follow the federal loss deduction. New Jersey lets you “use your gambling losses to offset gambling winnings from the same year as long as they do not exceed your total winnings,” taxes New Jersey Lottery prizes over $10,000, and withholds 5% on lottery payouts between $10,001 and $500,000 and 8% above $500,000. [8] Pennsylvania determines gambling income “by taking total winnings and subtracting the total costs of wagers,” and allows nothing else: “No expenses attributable to gambling and lottery income are deductible.” [9] Some states allow no loss deduction at all, so a break-even year is taxed on the full winnings. The optional state rate in the calculator applies your rate to the federal taxable figure, which is only right where the state follows the federal deduction; the state-by-state hub has each state's rule, including New Jersey and Pennsylvania.
Are professional gamblers hit by the 90% rule too?
Yes. A professional reports on Schedule C, but section 165(d)(2) makes “any deduction otherwise allowable under this chapter incurred in carrying on any wagering transaction” part of losses from wagering transactions. [1] For 2026 that means wagering losses and business expenses are added together, 90% of the total is allowed, and the result is capped at winnings. A professional who wins $200,000 and has $170,000 of losses and expenses combined deducts $153,000 and shows $47,000 of net profit, subject to self-employment tax. The professional gambler calculator runs that case with a separate expenses input.
Is the 90% rule going to be repealed?
Not yet, and not for the 2026 return unless Congress acts. On September 16, 2026 the House Ways and Means Committee voted 38-5 to advance H.R. 10357, the Digital Asset Tax Certainty Act sponsored by Rep. Jason Smith, which carries the FULL HOUSE Act language (Reps. Horsford and Miller, January 2026) restoring the 100% deduction retroactive to January 1, 2026. [10] [11] [13] [14] The House is not expected to vote on it before the November 2026 midterm elections, the Senate has not acted, and nothing has been signed. [10] The FAIR BET Act, H.R. 4304 (Rep. Titus), remains a separate pending bill. [12]
As of September 27, 2026 the 90% rule is the law for 2026 returns filed in 2027, and this calculator applies it. If a repeal is enacted we will change the engine and this page the same day.
How W2gMatch gets these two numbers from real documents
The calculator is only as good as the two totals you type. W2gMatch is the easiest, quickest, most accurate way to track and reconcile your gambling winnings, statements and sessions: it reads your W-2Gs, sportsbook and casino win/loss statements and IRS wage and income transcript, ties every figure back to its source document, applies the session method and the 90% rule, and hands you or your preparer one workpaper with the deductible losses and taxable income already computed. The reconciliation guide shows how the documents fit together; the sample file shows the finished result on real documents with no sign-up.
Frequently asked questions
- How much of my gambling losses can I deduct in 2026?
- 90% of your losses, and no more than your winnings. Under IRC section 165(d) as amended by Public Law 119-21 (section 70114), the deduction for tax years beginning after December 31, 2025 equals 90 percent of losses and is allowed only to the extent of gains. You must itemize on Schedule A.
- What is phantom income from gambling?
- The 10% of losses the 2026 rule no longer lets you deduct. Win $100,000 and lose $100,000 and you deduct $90,000, so $10,000 is taxed even though you broke even.
- Does the 90% rule apply to 2025 taxes I file in 2026?
- No. It applies to tax years beginning after December 31, 2025, so your 2025 return (filed in 2026) still deducts 100% of losses up to winnings. The first affected return is the 2026 return filed in early 2027.
- What is the tax rate on gambling winnings in 2026?
- There is no separate rate. Winnings are ordinary income taxed in your federal bracket, 10% to 37% for 2026 (IRS IR-2025-103), plus state income tax in most states. A $5,000 win costs $600 at 12% and $1,200 at 24%.
- Is the 24% the casino withheld all the tax I owe?
- No. It is a prepayment. Payers withhold 24% only when winnings minus the wager exceed $5,000 from lotteries, sweepstakes, or wagers paying at least 300 times the bet; never on slots, bingo or keno (IRS W-2G instructions). Your return settles the difference either way.
- Do I owe tax in 2026 if I broke even?
- If you itemize, yes. Amended section 165(d) allows only 90% of losses for tax years beginning after December 31, 2025. Win $20,000 and lose $20,000: $18,000 is deductible, $2,000 is taxable, about $440 at 22%. In 2025 the same year owed $0.
- Do I have to itemize to deduct gambling losses?
- Yes. Gambling losses are an itemized deduction on Schedule A. For 2026 the standard deduction is $16,100 single, $32,200 married filing jointly and $24,150 head of household (IRS IR-2025-103), so if your itemized total is below that you deduct no losses at all.
- Do I have to pay tax on winnings under $2,000 with no W-2G?
- Yes. The $2,000 figure is only the payer's 2026 reporting threshold for Form W-2G (IRS). Topic 419 says gambling winnings are fully taxable and must be reported, including amounts not shown on a W-2G.
- Does the 90% limit hit professional gamblers too?
- Yes. Section 165(d)(2) folds business expenses of wagering into losses from wagering transactions, so a professional's losses plus expenses are together limited to 90% and capped at winnings.
- Has the 90% rule been repealed?
- No. On September 16, 2026 the House Ways and Means Committee voted 38-5 to advance H.R. 10357, which carries language restoring the 100% deduction from tax year 2026, but the House has not voted, the Senate has not acted and nothing is enacted. The 90% rule is the law for 2026 returns as of September 27, 2026.
Sources
- 26 U.S.C. section 165(d), Wagering losses, as amended by Pub. L. 119-21 section 70114 (Legal Information Institute) (amendment effective for taxable years beginning after December 31, 2025)
- H.R. 1, Public Law 119-21 (One Big Beautiful Bill Act), text at congress.gov (signed July 4, 2025)
- IRS Tax Topic 419, Gambling income and losses (page last reviewed September 24, 2026)
- IRS, IR-2025-103, tax inflation adjustments for tax year 2026 (Rev. Proc. 2025-32) (October 9, 2025)
- IRS Instructions for Forms W-2G and 5754 (revised January 2026)
- IRS Publication 501, Dependents, Standard Deduction, and Filing Information (2025) (for use in preparing 2025 returns)
- IRS Publication 529, Miscellaneous Deductions, Gambling losses up to the amount of gambling winnings (revised December 2020)
- New Jersey Division of Taxation, Lottery and gambling winnings (last updated April 1, 2026)
- Pennsylvania Department of Revenue, PA Personal Income Tax Guide, Gambling and lottery winnings (undated guide page)
- Covers, House committee advances repeal of 90 percent gambling loss deduction limit (September 16, 2026)
- H.R. 10357, Digital Asset Tax Certainty Act, 119th Congress, at congress.gov (committee action September 16, 2026)
- H.R. 4304, FAIR BET Act, 119th Congress, at congress.gov (pending in the 119th Congress)
- Legal Sports Report, Gambling loss deduction fix clears key hurdle (September 2026)
- Paulick Report, Gambling tax fix clears House Ways and Means Committee (September 2026)
- IRS Office of Chief Counsel, AM 2008-011, Reporting of wagering gains and losses (December 12, 2008)
- IRS Notice 2015-21, proposed safe harbor for determining wagering gains and losses from electronically tracked slot machine play (March 2015)
This page is general information about how U.S. federal and state tax rules apply to gambling, written to be checked against the sources it cites. It is not tax advice for your situation. A licensed CPA or enrolled agent should review your return before it is filed.
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