Form W-2G (Rev January 2026) Certain Gambling Winnings

New IRS rules effective 2026, stemming from the One Big Beautiful Bill, limit gambling loss deductions to 90% of winnings, meaning you pay tax on 10% even if losses equal winnings, requiring itemizing deductions on Schedule A and reporting all income on Form 1040, with higher reporting thresholds for W-2G forms (e.g., $2,000 for certain payments). You must still report all winnings and cannot net losses against winnings directly; losses only reduce taxable income up to the 90% cap. Key Changes for 2026 Beyond Limited Loss Deduction: The biggest change is that you can now only deduct up to 90% of your gambling losses against your winnings; the remaining 10% is taxed, even if your losses were higher than your winnings. No More Netting: You cant subtract losses from winnings and report the net amount. You must report total winnings as income and then deduct losses as an itemized deduction (on Schedule A). Increased Reporting Thresholds: The minimum amount for reporting certain winnings on Form W-2G has increased to $2,000 (indexed for inflation), meaning casinos and payers will issue W-2Gs less often for smaller wins, says RSM US and the IRS. Itemize to Deduct Losses: You must itemize your deductions on Schedule A to claim any gambling losses; standard deduction filers get no benefit. How It Works (Example) Before 2026: You win $5,000 and have $3,000 in losses (itemized). Your taxable win is $2,000 ($5k - $3k). Starting 2026: You win $5,000 and have $3,000 in losses (itemized). You deduct 90% of losses ($2,700). Your taxable win is $2,300 ($5k - $2.7k). What You Must Do Report All Winnings: Even small wins not reported on a W-2G must be included as other income on your tax return (Schedule 1, Form 1040). Keep Records: Meticulous records of all winnings and losses are crucial to claim deductions accurately. Professional Gamblers: If you gamble for profit (not a hobby), you file as a business (Schedule C) and can deduct losses fully, but pay self-employment tax. Topic no. 419, Gambling income and losses | Internal Revenue ServiceA payer is required to issue you a Form W-2G, Certain Gambling Winnings if you receive certain gambling winnings or have any gamblIRS (.gov)Big Beautiful Bill brings big tax reporting changes for industryJan 5, 2026 In the instructions Whats New section, the Service clarifies that the threshold for reporting certain gambling winnRSM US

Beginning January 1, 2026, the threshold for gaming revenue reported on form W-2G increases to $2,000. It will be adjusted for inflation in subsequent tax years.Jan 15, 2026