For Tax Year 2025, you can deduct 100% of your gambling losses up to the total amount of your gambling winnings. Any excess losses cannot be carried forward to future years.
To claim your losses, you must itemize your deductions on Schedule A of Form 1040. If you take the standard deduction, you cannot deduct any of your gambling losses.
Important for Tax Year 2026: As of January 1, 2026, deductible gambling losses will be limited to 90% of the losses, still capped at the total amount of winnings.
Example of the 2026 Rule
| Scenario (2026) | Winnings | Losses | 90% of Losses | Allowable Deduction (Lesser of 90% Losses or Winnings) | Taxable Income |
|---|---|---|---|---|---|
| Break-even | $10,000 | $10,000 | $9,000 | $9,000 | $1,000 |
| Net Loss | $20,000 | $25,000 | $22,500 | $20,000 | $0 (Deduction capped at winnings) |
| Net Win | $50,000 | $40,000 | $36,000 | $36,000 | $14,000 |