WinLoss Ledger

Guide · Federal income tax · Tax year 2026

The 2026 90% gambling loss rule, explained

For tax year 2026, only 90% of your gambling losses can be deducted, and never more than your winnings. Here is what that means in plain words.

General information, not tax advice. It explains how the rules read and where the law is unsettled. It does not tell you what to do. A qualified tax professional can apply it to your situation. This page has not yet been reviewed by a tax professional.

Federal income tax only. Last checked November 10, 2026.

What changed

The law lets you deduct gambling losses, but only up to the amount of your gambling winnings for the year. For tax years that begin after December 31, 2025, a second limit applies: the deduction is equal to 90% of your losses. In practice, your deduction is the smaller of two numbers:

This comes from section 165(d) of the Internal Revenue Code as amended by Public Law 119-21 (signed July 4, 2025). For a calendar-year taxpayer, it first applies to the return you file for 2026.

Worked examples

The numbers below are calculated from the same rule file that powers this site. They are illustrations, not predictions for your return.

SituationWonLostDeductionAdded to taxable income
Break even, and itemize $10,000 $10,000 $9,000 $1,000
Lose more than you won, and itemize $5,000 $8,000 $5,000 $0
Break even, but take the standard deduction $4,000 $4,000 $0 $4,000

In the first example, a bettor who broke even still has $1,000 of extra taxable income, because only 90% of the losses can be deducted. In the third, the bettor takes the standard deduction, so no loss is deductible at all.

You only get the deduction if you itemize

The IRS says gambling winnings are reported as income on Schedule 1 of Form 1040. Losses are deducted separately, as an itemized deduction on Schedule A. If you take the standard deduction, you get no deduction for gambling losses. The two are not netted against each other: your full winnings are income either way.

Whether itemizing makes sense for you depends on all of your deductions, which is a question for you and your tax preparer.

Why a break-even year can still cost you

Your winnings count as income in full. Your losses come off later, as an itemized deduction, and now only at 90%. Two things follow. The 10% that is no longer deductible stays in your taxable income, and your adjusted gross income goes up by your full winnings, which can affect other items on your return.

Married filing jointly

A proposed Treasury regulation (Prop. Reg. section 1.165-10(b)) says the limit applies to a couple's combined losses and combined winnings. It is a proposed rule, not a final one.

Could the rule change?

Possibly. H.R. 10357 includes a provision that would remove the 90% limit and restore the deduction of losses up to winnings, back to tax year 2026. The House Ways and Means Committee approved it 38 to 5 on September 16, 2026.

As of November 10, 2026, it is not law. We found no House floor vote yet. Press reports dated November 5 say it is still waiting for one, and that it would also need the Senate and a signature before the end of the year.

Until Congress acts, the 90% limit is the rule for 2026. If the bill passes, the figures on this page will change and we will update it.

What counts as one win or one loss?

In a case about slot machines, the Tax Court measured gain or loss per session, not per spin. Nothing we found addresses sports betting, daily fantasy or prediction markets. So there are at least two reasonable ways to count: each bet by itself, or the net of each day on each platform. The totals can come out differently, and that changes what lands on Schedule 1 and Schedule A. This is a question for your preparer. Our report will show the alternatives side by side.

Keep good records

The IRS says to keep an accurate diary or similar record of your winnings and losses, plus receipts, tickets and statements. A statement from your sportsbook is one of those. A W-2G covers only large wins and does not show your losses, so it cannot be your whole record.

Other things to know

Get the report when it is ready

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Sources