How gambling winnings are taxed
Every dollar you win gambling is taxable income: casino games, sports betting, poker, horse racing, raffles and lottery prizes alike. Winnings count even when no tax form is issued and nothing is withheld. They are added to your other income and taxed at your regular federal rates, from 10% to 37%, and most states tax them too.
The calculator above treats winnings as extra income on top of what you already earn, the same way as our lottery tax calculator: tax with your gambling minus tax without it. It is built for casual gamblers. Professional gamblers report on Schedule C under different rules.
The 2026 rule: only 90% of losses are deductible
Starting with the 2026 tax year, you can deduct only 90% of your gambling losses, and never more than your winnings (IRS Publication 505 for 2026; 26 U.S.C. 165(d), as amended by the One Big Beautiful Bill Act). The IRS proposed regulations explain the change but are not final regulations. Before 2026, losses were deductible in full up to your winnings.
That means a gambler who exactly breaks even can still owe tax. A single filer earning $60,000 who wins $50,000 and loses $50,000 can deduct only $45,000, so $5,000 of the losses cannot offset winnings. Federal tax on that gambling year comes to about $3,992, against $2,892 under the old rule.
You can deduct losses only if you itemize
Gambling losses are an itemized deduction on Schedule A, and you need records of your winnings and losses (IRS Topic 419). If you take the standard deduction — $16,100 for a single filer in 2026, $32,200 for a married couple filing jointly — your losses do not reduce your tax at all. Someone earning $60,000 who wins $10,000 and loses $6,000 is usually better off with the standard deduction, and pays about $1,550 in federal tax on the winnings, the same as with no losses at all ($1,550).
Itemizing helps when your losses plus your other itemized deductions, such as mortgage interest, state and local taxes and charitable gifts, add up to more than the standard deduction. Enter those under “Other itemized deductions” to see whether it pays.
Form W-2G: when the payer reports your winnings
Casinos, sportsbooks and lotteries report qualifying wins to the IRS on Form W-2G. For payments made in 2026, the minimum reporting threshold rose to $2,000 and will be adjusted for inflation from 2027. The table covers common games; additional reporting conditions depend on the wager (IRS Instructions for Forms W-2G and 5754).
| Type of winnings | W-2G before 2026 | W-2G in 2026 | 24% withheld |
|---|---|---|---|
| Slot machines and bingo | $1,200 or more | $2,000 or more | No |
| Keno | $1,500 or more, after the wager | $2,000 or more, after the wager | No |
| Lotteries, sweepstakes and pools | $600 or more and 300× the wager | $2,000 or more and 300× the wager | Over $5,000, after the wager |
| Sports betting and horse racing | $600 or more and 300× the wager | $2,000 or more and 300× the wager | Over $5,000 and 300× the wager |
Thresholds from the IRS instructions (01/2026) and REG-113229-25. A payer can also withhold 24% as backup withholding if you do not give your taxpayer identification number.
A W-2G is only a report. Winnings below these amounts are still taxable, and the 24% withheld from a big win is a prepayment: if your top rate is higher, you owe the difference when you file. Enter what was withheld (box 4 of each W-2G) to see what is left to pay.
Sports betting taxes
Sports betting winnings are taxed like any other gambling income. Each winning bet adds to your winnings for the year and each losing bet is a loss, so a season that ends roughly even can still leave a tax bill under the 90% rule if you itemize, and a full tax on the winnings if you do not. Sportsbooks withhold 24% only when winnings minus the stake are more than $5,000 and at least 300 times the stake, which is rare outside long-shot parlays.
State tax on gambling winnings
Most states tax gambling winnings as income. Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming have no state income tax on them. Whether your state lets you deduct gambling losses differs from state to state, so the calculator taxes your winnings at your state's 2026 rates without subtracting losses, which may overstate the state tax in states that allow the deduction. Compare state income tax rates in lottery tax by state.
Common questions
How much tax do you pay on $10,000 of gambling winnings?
For a single filer already earning $60,000, about $1,550 in federal income tax, because the winnings fall mostly in the 22% bracket. State tax comes on top in most states. Losses lower that only if you itemize, and then only 90% of them from 2026.
What is the W-2G threshold for 2026?
$2,000 for payments made in 2026, up from $1,200 for slots and bingo, $1,500 for keno and $600 for other wagers. For lotteries, sports betting and horse racing the win must also be at least 300 times the wager. The amount will be indexed to inflation after 2026.
Can you deduct gambling losses with the standard deduction?
No. Gambling losses are deductible only as an itemized deduction on Schedule A. If you take the standard deduction, your losses do not reduce the tax on your winnings.
Do you pay taxes on sports betting if you lose overall?
Yes, you can still owe tax. Report your winnings separately from losses. From 2026, only 90% of losses can be deducted, capped at winnings, and only if you itemize. For example, $100,000 won and $105,000 lost leaves $5,500 of winnings not offset by the loss deduction, even though you lost $5,000 overall. Taking the standard deduction leaves all winnings in income.