Sports Betting Taxes: What US Bettors Should Know

Sports betting winnings are taxable income in the US, whether or not the sportsbook sends you a tax form. This guide explains how winnings are reported, when a sportsbook withholds tax, how losses work (including a change that starts with the 2026 tax year), and the records to keep.

This is general information, not tax advice. Tax rules depend on your situation, so check with a tax professional before you file.

Winnings are taxable income#

The IRS says gambling winnings are fully taxable. You report them on Schedule 1 of Form 1040, as "gambling" income. That covers every win, not just the ones that come with a form. Report the full amount of your winnings: losses are handled separately, as a deduction (more below), not by netting them against wins.

Form W-2G: when a sportsbook reports your win#

A sportsbook sends you and the IRS a Form W-2G for a sports bet when both of these are true:

• The winnings are at least $2,000. That's the threshold for payments made in 2026, up from $600, and it's indexed for inflation from 2027.
• The winnings are at least 300 times your stake.

Because of the 300-times test, most ordinary bets never produce a W-2G. It's mostly long-shot parlays and futures that cross it. No form doesn't mean no tax: the winnings still go on your return.

When tax is withheld#

A sportsbook must withhold 24% for federal income tax when your winnings minus your stake exceed $5,000 and the winnings are at least 300 times the stake. The 24% applies to the whole net win (winnings minus stake), not just the part above $5,000.

If you don't give the sportsbook a correct Social Security number or taxpayer ID, it can apply 24% backup withholding to smaller reportable wins too.

Withholding is a prepayment, not your final bill. Depending on your tax bracket, you may owe more or get some back.

Deducting losses, and the 2026 change#

You can deduct gambling losses only if you itemize deductions on Schedule A, and only up to the amount of winnings you report. If you take the standard deduction, your losses don't reduce your tax at all.

Starting with the 2026 tax year, there's a further limit. The 2025 tax law (often called the One Big Beautiful Bill Act) lets you deduct only 90% of your losses, still capped at your winnings. A simple example:

So a year where you break even can still leave you with taxable income. The IRS has proposed regulations for this rule; the 90% limit itself is already law for 2026.

Records to keep#

The IRS expects you to be able to prove your wins and losses. Publication 529 says to keep a diary showing, for each bet:

• the date and type of wager;
• where you placed it (the sportsbook or app);
• the amount you won or lost.

Keep receipts, statements and W-2Gs too. The betting history in your sportsbook account helps you build the record. A bet tracker can also keep a running log; our guide to sports betting tools covers how trackers work.

Picks subscriptions and tools#

For most recreational bettors, the cost of a picks group or a betting tool isn't deductible. Miscellaneous itemized deductions subject to the 2% floor can no longer be claimed, and under the tax code, other deductions incurred in making wagers fall under the same cap as losses. Professional gamblers, who bet as a business, are treated differently, but that status depends on detailed facts and is a question for a tax professional.

That makes the subscription a real cost worth counting. Our guide to picks groups explains how to add it up over a season.

State taxes#

Your state may tax gambling winnings too, and some states tax winnings from bets placed there even if you live elsewhere. New York, for example, counts winnings over $5,000 from wagering in New York as New York income for nonresidents. Check your state's revenue department, and the state where you placed the bet if it's different.

A few practical tips#

1. Track as you go. Rebuilding a year of bets in April is hard.
2. Set aside money for tax after a big win, especially if nothing was withheld.
3. Count everything: winnings, losses, subscriptions and tools. Our guide to units, ROI and records explains how to read your real results.
4. Keep betting within a budget. Our guide to responsible gambling tools explains how to set limits.

OOSClub lists picks groups on the picks hub and betting tools separately. We don't give tax advice or link to sportsbooks.