Poker taxes in 2026: what the 90% rule does to a break-even year
From 2026 you can deduct only 90% of your gambling losses. Here is the rule, its source, what it does to a break-even year, and a calculator.
The rule
From the 2026 tax year, you can deduct only 90% of your gambling losses, and still no more than your gambling winnings. Before 2026 you could deduct 100% of your losses, up to your winnings.
The change is section 70114 of Public Law 119-21 (approved Jul 4, 2025), which rewrote 26 U.S.C. § 165(d). The new text says the deduction "shall be equal to 90 percent of the amount of such losses during such taxable year" and "shall be allowed only to the extent of the gains from such transactions during such taxable year". It applies to "taxable years beginning after December 31, 2025".
Checked Oct 19, 2026. Sources: Public Law 119-21, sec. 70114 (GovInfo) (opens in a new tab); 26 U.S.C. § 165(d) (Cornell LII) (opens in a new tab).
What it does to a break-even year
Win $10,000 and lose $10,000, and your net result is $0. Under the 90% rule you deduct $9,000, so $1,000 of gambling income is left to tax. Under the old rule it was $0.
Win $50,000 and lose $45,000: you're up $5,000, but $9,500 is left to tax, $4,500 more than under the old rule.
| Your year | Net result | Old 100% rule | 2026 90% rule | Extra taxed |
|---|---|---|---|---|
| $10,000 won, $10,000 lost | $0 | $0 | $1,000 | $1,000 |
| $50,000 won, $45,000 lost | $5,000 | $5,000 | $9,500 | $4,500 |
| $20,000 won, $30,000 lost | -$10,000 | $0 | $0 | $0 |
| $5,000 won, $0 lost | $5,000 | $5,000 | $5,000 | $0 |
If you lose more than you win, the deduction is still capped at your winnings, so a losing year leaves nothing to tax under either rule. If you take the standard deduction, losses don't count at all and every dollar of winnings is income.
Calculator
Sweepstakes poker
Prizes you redeem from a sweepstakes site can be taxable too. Clubs Poker's Sweepstakes Official Rules (PDF) (opens in a new tab) say each winner "is solely responsible for all federal, state, local, or other applicable taxes", that the site "may be required to withhold and remit a portion of Prize value", and that winners agree to give a Social Security number if asked. The rules don't name a tax form. How sweepstakes poker works.
Can Congress change it? Status as of Oct 19, 2026
Bills to restore the 100% deduction have been filed, but none is law. As of Oct 19, 2026:
- On Sep 16, 2026, the House Ways and Means Committee voted 38-5 to approve a broader tax package that contains the fix. It still needs the full House and the Senate.
- Covers reported on Oct 8 that there is no announced timeline and that the House wasn't expected to act until after the November midterm elections.
- Two Nevada members have their own bills: Rep. Steven Horsford's FULL HOUSE Act, with Rep. Max Miller of Ohio, and Rep. Dina Titus's FAIR BET Act.
Until a change passes, plan on the 90% rule for 2026.
Checked Oct 19, 2026. Source: Covers, Oct 8, 2026 (opens in a new tab).
Keep records
Losses have to be backed up. Keep a log of each session (date, place or site, game, amount won or lost) along with statements and receipts. The IRS explains what to keep in Topic 419, Gambling income and losses (opens in a new tab); that page doesn't mention the 90% limit.