Two federal changes apply to 2026 play
1. Losses count at 90%
The One Big Beautiful Bill Act (section 70114) amended Internal Revenue Code section 165(d) to limit the deduction for wagering losses to 90% of the losses, effective for tax years beginning after December 31, 2025. The older rule stays as well: losses are deductible only up to the amount of winnings, and only if you itemize.
An example of the arithmetic, not advice: a year with $10,000 of winnings and $10,000 of losses. Under the rule that applied through 2025, the deduction was $10,000 and the net was zero. For 2026, the deduction is 90% of $10,000, which is $9,000, so $1,000 of winnings is taxed even though the year broke even. The KPMG analysis cited below reads the 90% cap as also reaching the other expenses of carrying on a wagering transaction, which matters mainly to professional gamblers.
2. The W-2G threshold is $2,000
The Instructions for Forms W-2G and 5754 (revised January 2026) say: "The minimum threshold amount for payments made in calendar year 2026 is $2,000." A slot jackpot under that amount no longer produces a W-2G, so more of what you win is reported by nobody but you. Casinos in some states may still stop a machine at the old $1,200 figure for their own reasons; that does not change the federal form.
Where the repeal stands
Bills to restore the full deduction (the FAIR BET Act and others) were introduced in 2025. On September 16, 2026 the House Ways and Means Committee voted 38–5 to advance a repeal of the 90% limit inside H.R. 10357; a floor vote was not expected before the November election, and the Senate has not acted. If a repeal passes, it may or may not be retroactive to January 1, 2026. We update the status line at the top of this page when that changes.
What it means for your records
- Every loss is worth less, so every loss has to be provable. With only 90% of losses deductible, an undocumented loss is lost twice.
- Fewer W-2Gs means fewer forms doing your bookkeeping for you. Under the $2,000 threshold, a $1,500 jackpot is still income; the only record of it is yours.
- Keep the diary the way Publication 529 describes it: date and type of wager, place, who was with you, amounts won or lost, and for slots the machine number with the time played. The full list, in the IRS's words.
- Keep both numbers. Your preparer will want the losses as they happened and the 90% figure. StampChip's Preparer Pack computes both deduction bases from the same sessions.
States
State income tax rules for gambling winnings and losses differ from the federal rules and from each other; some states allow no loss deduction at all. This page is about the federal return only.
Keep the record on your phone
StampChip keeps the Publication 529 diary on your phone, stamps each check-in with the time and place, and at tax time builds a Preparer Pack with every session, the W-2G reconciliation and both deduction bases.
StampChip is in private testing on Android; the demo shows the three taps.
Sources
- Public Law 119-21 (One Big Beautiful Bill Act), section 70114, "Extension and modification of limitation on wagering losses", as summarized by KPMG: Gambling losses under One Big Beautiful Bill.
- IRS, Instructions for Forms W-2G and 5754 (01/2026): "The minimum threshold amount for payments made in calendar year 2026 is $2,000."
- IRS, Publication 529 (12/2020), the diary requirements.
- Covers, House Vote Advances Repeal of 90% Gambling Loss Deduction Limit (September 16, 2026).
- Casino.org, The Latest on Gambling Tax Law Changes That Became Effective Jan. 1, 2026 (January 1, 2026).