What Tax Rate Do You Pay on Kalshi Winnings? The 2026 Table

There is no special prediction-market tax rate. Your Kalshi profit is added to the rest of your income and taxed at your normal rate, somewhere from 10% to 37%. The one exception is Section 1256, which blends in the lower long-term rate. Here is the 2026 table, and the two things that make the real number higher than the rate suggests.

The 2026 table (single filer)

Find the row your income lands in, including your Kalshi profit. These are the IRS’s 2026 brackets from Revenue Procedure 2025-32.

Married filing jointly roughly doubles each threshold: the 24% bracket, for example, runs from $211,401 to $403,550. The Section 1256 column is 60% of your gain at the long-term rate (0%, 15% or 20%, depending on income) plus 40% at the rate in the middle column.

Why capital gains doesn’t help here

Long-term capital gains rates (0%, 15%, 20%) only apply to assets held more than a year. Almost every Kalshi contract is held for days or weeks, so under capital gains treatment your profit is short-term and taxed at exactly the same rate as ordinary income. The two methods only differ when you have a loss, because of the $3,000 limit. Section 1256 is the one route where holding period stops mattering, which is why its column is lower, and why it is the one tax professionals argue about most. (Why it’s contested.)

Your profit sits on top of your other income

A bracket is a marginal rate: it applies to the last dollars you earn. Your Kalshi profit comes on top of your salary, so it is usually taxed at your highest bracket, and a big year can push part of it into the next one. If your taxable income is $95,000 before Kalshi and you make $20,000 on Kalshi (single filer), the first $10,700 of the profit is taxed at 22% and the remaining $9,300 at 24%.

Gambling treatment changes the base, not the rate

Under gambling treatment the rate is still your normal rate. What changes is what it is charged on. You are taxed on your total winnings, and losses only come off if you itemize, and only 90% of them from 2026. So the “rate” can look like 24% while the bill works out to far more than 24% of what you actually made. The main guide has a worked example where a $20,000 profit produces a $14,400 bill.

Getting your actual number

The table tells you a rate. Your bill depends on your full year of trades, fees and losses, and on the treatment you choose. WagerMints computes the tax under all four treatments from your Kalshi export or Polymarket wallet, so you can see the actual dollar gap rather than estimating it from a table.