Beginning in 2026, the tax rules for gambling losses are more restrictive.
👉 New Cap on Gambling Losses
First, taxpayers may deduct only 90% of their yearly gambling losses. Second, those deductible losses cannot exceed total gambling winnings, maintaining a key restriction from prior law. For instance, if a taxpayer has $10,000 in losses and $12,000 in winnings, only $9,000 (90% of losses) is deductible. If winnings are just $8,000, the deduction is capped at $8,000.
👉 Expands What Counts as Gambling Losses
The new law also broadens what counts as a wagering loss. Any expense tied to gambling activity, such as travel, admission or lodging, falls under the same 90% and winnings-based limits.
👉 Effective Date
Applicable to tax years beginning after Dec. 31, 2025.
Interested in reducing your tax burden in 2025 and beyond? Our tax reduction consulting service is designed to help you take full advantage of recent changes in tax law. To schedule a meeting with an Easy Tax Service Professional, please call 928-775-7000 Ext 0 and speak with our receptionist.