Gambling Loss Deduction Calculator

New for the 2026 tax year (OBBBA)

Gambling Loss Deduction Calculator

See how the new 90% loss-deduction limit taxes you on "phantom" winnings — even in a break-even year.

Starting with the 2026 tax year, the One Big Beautiful Bill Act (OBBBA) limits the gambling loss deduction to 90% of your losses, still capped at your total winnings. The practical effect is brutal: a gambler who wins and loses the same amount no longer breaks even for tax purposes — they're taxed on 10% of their winnings, money they never actually kept. This calculator shows your deductible losses, your taxable "phantom income," and how much worse 2026 is than the old rules. Enter your figures below.

$
All reported wins — casino, sports betting, poker, lottery.
$
Documented losses from your gambling diary/statements.
Please enter your gambling winnings to calculate.
Taxable "phantom income" created by the 90% rule
$0
Income you'll be taxed on despite not keeping it.
Deductible losses (2026)
$0
Taxable gambling income
$0
Est. extra tax vs 2025
$0
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Missing winnings figure

Please enter your total gambling winnings before calculating — it's the required field.

How the 2026 gambling loss deduction works

Under prior law, you could deduct gambling losses up to the full amount of your winnings, so a break-even year meant zero taxable gambling income. The OBBBA changed that for tax years beginning after 31 December 2025. Now you can only deduct 90% of your losses, and that deduction is still capped at your winnings. The remaining 10% becomes taxable income even if, in cash terms, you came out flat or behind.

The 2026 formula (IRC §165(d) as amended)
Deductible losses = 90% × the lesser of (losses, winnings)
Taxable gambling income = winnings − deductible losses
Break-even (losses = winnings) → taxed on 10% of winnings
Worked example — $50,000 won, $50,000 lost: deduction = 90% × $50,000 = $45,000. Taxable phantom income = $50,000 − $45,000 = $5,000. At a 24% rate, that's $1,200 of tax on a break-even year.

You must itemize — and that's the catch

Gambling losses are only deductible if you itemize on Schedule A. If you take the standard deduction (as most filers do), you can deduct none of your losses, and your entire winnings are taxable. This calculator lets you toggle itemizing on or off so you can see both scenarios. Casual gamblers should check whether their gambling losses plus other itemized deductions even clear the standard deduction before assuming they'll benefit.

What still hasn't changed

  • Losses can never exceed winnings — a net gambling loss is still not deductible against other income.
  • Excess losses don't carry forward to future years; they simply vanish.
  • Winnings are taxed in full, including non-cash prizes at fair market value.
  • Sports betting and fantasy contests are covered by the same rules as casino play.
  • Professionals filing on Schedule C face the same 90% cap, plus self-employment tax on net income.

Could this rule be repealed?

Possibly. The 90% cap was unpopular from the moment it appeared, and the FAIR BET Act was introduced to restore the full 100% deduction, with bipartisan support. As of early 2026 it had not passed, so the 90% limit is the law for the 2026 tax year. Treat any repeal as a maybe, not a given, and plan around the current rule.

Don't forget your state

Several states tax gambling winnings in full but disallow loss deductions entirely, which can produce a state tax bill even in a break-even year — on top of the new federal phantom income. This tool estimates federal impact only; check your state's treatment separately.

Scenario ($100k won, $100k lost)2025 rule2026 rule
Deductible losses$100,000$90,000
Taxable gambling income$0$10,000
Tax at 24%$0$2,400

For related planning, see how large winnings ripple into other parts of your return using the income tax calculator, model self-employment obligations for professional players with the net income calculator, and check overall tax drag with the paycheck calculator. If you're weighing whether to itemize at all, the budget planner and ROI calculator can help frame the bigger picture.

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Frequently asked questions

How is the 2026 gambling loss deduction calculated?+
For tax years beginning in 2026, you can deduct only 90% of your gambling losses, and the deduction is still capped at your total winnings. So you take the lesser of your losses or your winnings, multiply by 90%, and that's your maximum deduction. Your winnings minus that deduction is your taxable gambling income.
Why do I owe tax if I broke even?+
Because only 90% of your losses are deductible. If you win $40,000 and lose $40,000, you can deduct just $36,000, leaving $4,000 of taxable "phantom income" even though you didn't actually profit. This is the core change critics have nicknamed the phantom income problem.
Do I have to itemize to claim gambling losses?+
Yes, for casual gamblers. Gambling losses are an itemized deduction on Schedule A. If you take the standard deduction, you cannot deduct any losses, and your full winnings are taxable. Professional gamblers report on Schedule C instead.
Does this apply to sports betting and online gambling?+
Yes. The rules apply to all forms of legal gambling, including sports betting, daily fantasy sports, online casinos, poker tournaments, lottery, and horse racing. Winnings and losses across all activities are combined for the year.
Can I carry forward losses I couldn't deduct?+
No. Gambling losses that exceed your winnings, or the 10% that's now non-deductible, cannot be carried forward to a future year. They are simply lost. This is different from capital losses, which can carry forward.
When does the 90% limit take effect?+
It applies to tax years beginning after 31 December 2025 — so your 2026 return, which you'll file in early 2027. Gambling in 2025 still uses the old 100% rule. Plan ahead so the phantom income doesn't surprise you.
Could the 90% rule be reversed before I file?+
It's possible. The FAIR BET Act was introduced to restore the full deduction and has bipartisan backing, but it had not passed as of early 2026. Until it does, the 90% cap is the law for 2026. Keep an eye on legislative updates through the year.
Does my state let me deduct gambling losses?+
It varies. Some states tax winnings in full while disallowing loss deductions altogether, which can create a state tax bill even in a break-even year. This calculator estimates federal impact only — check your own state's rules separately.
This calculator provides general estimates only and is not tax or legal advice. It models federal treatment of the OBBBA 90% gambling loss limitation for the 2026 tax year and does not account for state taxes, professional-gambler business expenses, the alternative minimum tax, or the top-bracket itemized deduction cap. Tax law in this area may change. Confirm your situation with a qualified tax professional.

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