Sports betting taxes (2026)

When you get a W-2G

The IRS’s 2026 instructions set the minimum reporting threshold at $2,000 for payments made in 2026, up from $600. For a sports bet, the payout also has to be at least 300 times your stake. So a $100 bet that pays $2,500 doesn’t produce a W-2G (25 times the stake), but a $50 parlay that pays $16,000 does (320 times).

No W-2G doesn’t mean no tax. It only means the IRS didn’t get a copy.

When tax is withheld

• 24% regular withholding when your winnings minus your stake are more than $5,000 and the payout is at least 300 times the stake. It’s figured on your whole win (payout minus stake), not just the part over $5,000. The $16,000 parlay above would have $3,828 withheld: 24% of $15,950.
• 24% backup withholding if you don’t give the sportsbook a correct Social Security number.

Withholding is a prepayment, not the final bill. If your bracket is higher, you owe the difference when you file.

How to report winnings and losses

• Winnings go on Schedule 1, line 8b, all of them, with or without a W-2G.
• Losses go on Schedule A, line 16. They only count if you itemize, and they can’t exceed your winnings.
• Winnings are not your net for the year. They are the total of your winning bets or sessions. A bettor who won $40,000 and lost $38,000 reports $40,000 of winnings, and the $38,000 only helps on Schedule A.

In TurboTax, look for gambling winnings under less common income. The losses screen comes after it. Line by line, including TurboTax.

The 90% rule from 2026

From tax year 2026, only 90% of gambling losses are deductible, and the result still can’t exceed your winnings. Win $100,000 and lose $100,000, and you can deduct $90,000, so $10,000 is taxed in a year you broke even. Giving up the standard deduction to claim the losses makes the gap bigger. Run your numbers in the calculator.

Keep a betting record

The IRS expects a record of your wins and losses: the date, the type of bet, where you placed it, and the amounts. Sportsbook account statements help, but download them before you close an account. Without records, a claimed loss is easy for the IRS to disallow.

Sports contracts on prediction markets are taxed differently

A sports contract on Kalshi, Polymarket US, DraftKings Predictions or FanDuel Predicts is an event contract on a CFTC-regulated exchange, not a sportsbook bet. The IRS hasn’t said how those are taxed, so traders use one of four methods, and only one of them is the gambling rules above. The four methods, compared, and what each platform sends you.

Your state

Most states tax gambling winnings too, and several don’t let you deduct the losses at all. Find your state.