Casino · sports betting · poker
Gambling Winnings Tax Calculator
From 2026 you can deduct only 90% of your gambling losses, and only if you itemize — so a year that breaks even at the casino can still produce a tax bill. Enter the year’s winnings and losses to see it.
Gambling winnings — results
Lump sum · take-home
52.4% kept of $45,000,000
Annuity · 30 payments
Year 1 $844,883 → year 30 $3,295,529
| Cash received | $45,000,000 |
|---|---|
| Federal income tax | −$16,619,330 |
| Tax to New Jersey | $0 |
| New Jersey tax | −$4,809,724 |
| Local income tax | $0 |
| You keep | $23,570,946 |
| Federal withholding (24%) | −$10,800,000 |
|---|---|
| State withholding | −$3,600,000 |
| Check you receive | $30,600,000 |
| Still owed when you file | $7,029,054 |
After-tax winnings
Total tax on $25,000 of winnings: $7,028
| Winnings | $25,000 |
|---|---|
| Losses you can deduct (90%) | $16,200 |
| Federal income tax | −$5,478 |
| State tax | −$1,550 |
| Local tax | $0 |
| Already withheld | $0 |
| Still owed when you file | $7,028 |
Data: IRS Rev. Proc. 2025-32 · state agencies, verified · what this leaves out
The 90% rule, in the statute
Section 165(d) of the Internal Revenue Code, as amended in 2025, now reads that the deduction for wagering losses “shall be equal to 90 percent of the amount of such losses” and is allowed “only to the extent of the gains.” The IRS restated it in Internal Revenue Bulletin 2026-19: 90 percent of losses, up to the extent of gains. Professional gamblers’ expenses count as losses under the same cap.
The arithmetic bites hardest on breakeven years. A single filer with $60,000 of wages who wins $100,000 and loses $100,000 can deduct only $90,000, so $10,000 of “phantom” income is taxed: about $5,092 of federal tax on a year that made no money. Itemizing is required to claim any of it; a smaller player who wins $8,000 and loses $6,000 deducts $0, because $5,400 of allowed losses does not beat the $16,100 standard deduction, and pays $1,110 federal on the full $8,000.
A bill that would restore the full deduction (the FULL HOUSE Act) passed the House Ways and Means Committee on September 16, 2026. It is not law; this calculator applies the 90% rule until it is.
W-2G and withholding in 2026
- Reporting. The One Big Beautiful Bill Act raised the W-2G threshold to $2,000 for payments after December 31, 2025, replacing the $1,200 slot-and-bingo and $1,500 keno thresholds; it is indexed for inflation after 2026.
- Regular withholding, 24%. Required when winnings minus the wager exceed $5,000 from sweepstakes, wagering pools, lotteries and sports or other wagers that pay at least 300 times the bet. Slots, bingo and keno are not subject to it.
- Backup withholding, 24%. Applies to reportable winnings — slots and poker tournaments included — when you do not give the payer a taxpayer ID.
- Noncash prizes. If the payer covers the tax on a car or trip, the rate is 31.58% of the prize’s value minus the wager.
- Nonresident aliens. 30% withholding, reported on Form 1042-S.
The 2/37 haircut for top-bracket itemizers
New § 68 trims itemized deductions by 2/37 of the smaller of your itemized deductions or the income above the start of the 37% bracket. A high-income gambler whose income reaches the 37% bracket therefore gets slightly less than 90% of losses as a deduction. The calculator applies the cut automatically.
State tax on gambling
States start from your winnings but treat losses very differently — some follow the federal itemized deduction, some allow none, some have their own rule. Rather than guess, the calculator taxes gross winnings at your state’s rates unless you enter the losses your state lets you deduct (under “Year, deductions and advanced”). Pennsylvania, for example, lets gambling losses offset only gambling gains; New Jersey taxes casino winnings with no lottery-style exemption. State pages describe what each state publishes.
Verified · Sources: 26 U.S.C. §§ 165(d), 68; IRS Instructions for Forms W-2G and 5754 (Jan. 2026); Publication 1099 (2026); IRB 2026-19; office of Rep. Susie Lee release of Sept. 16, 2026.