What the amendment says
$90,000 (90% of losses) or
$100,000 (the total winnings)
Whichever is less.
In this case, the deduction would be subject to the 90% loss limit, at $90,000, and the $10,000 difference would be taxable.
Both caps apply. The deduction is allowed for wagering losses, up to winnings in the same year, but in some cases the 90% loss limit is also a cap. If winnings for 2026 were $190,000, against which there were $200,000 of losses, the maximum deduction would be: 90% of $200,000 is $180,000, against
$190,000 of winnings. So again, 90% of the losses, $180,000, would be deductible and $10,000 of the losses would remain.
The break-even year that is taxed
A player who wagers at the casino, makes some deposits and wins, and that year needs to withdraw the remainder of the bankroll as total losses, will be surprised to find that the IRS final tax calculation shows an income thanks to this fact that the deduction is no longer allowed up to the full amount of winnings, only up to 90% of losses. $100,000 of winnings against 100,000 losses was tax neutral, is no more.
A taxpayer who won $100,000 from casinos in 2026 loses only 90% of $100,000, or $90,000, as a deduction.
The $10,000 of the losses that is not covered also does not carry forward to another year: the big win and the overall loss should be reported with each other in the same year.
That loss of 10,000, not covered, does not shelter income of any kind, including income from other sources. By comparison, a $100,000 wagerer
Would have been able to deduct
100,000
Without this change.
The new cap applies to the casino customer whose gain matched the losses. The 10% of the amount of the loss that is not deductible does not carry forward and does not offset other income (or income from other sources).
Who gets the deduction at all
Gambling losses were always an itemised deduction, and that would not change.
Many filers never deducted those losses and will still not be affected by this.
Because gambling losses are only allowable as a deduction, someone who makes the standard deduction does not get this write-off at all.
The amended treatment applies to gambling at the casino as a hobby
Or a trade or business.
Professional gamblers who are able to write off losses in the course of gambling for
Income would still be subject to the 90% cap
And cap the Losses at winnings.
It is not changed by this.
What has to be in your own records
Taxpayers deduct wagering losses up to the amount of winnings, not against their original bankroll.
Winnings are includable in income, no matter how they are determined or reported.
Even if losses were substantially greater than the winnings, the
Limit on winnings in the same year still applies
Gambling includes various activities for tax purposes:
The activity or event in which a taxpayer participates that involves placing money, or other stakes, on the chance of winning, such as slot machines, dice, wheel of fortune, or racehorses
The plays in a horse or dog-racing context, such as each race
Instants and/or daily number
It is good to know that gaming operators do not issue a statement about a player's
Winnings or Losses.
It simply does not exist and could not be used to support the filing; that tracking is part of their record-keeping with their actual operators and does not
Amount to A form that can be included
As an attachment with deductions.
The filer must have tracked the results of the wagering activity
And the amount of winnings.
