Are gambling losses still deductible in 2026? Here’s what’s changing

Introduction

Beginning in Tax Year 2026, a new rule introduced under the One, Big, Beautiful Bill Act (OBBBA) will change how gambling losses are deducted on federal tax returns.

While gambling winnings remain fully taxable, the amount of losses you can deduct will now be limited, even if you itemize deductions. This change may result in higher taxable income for many taxpayers who gamble regularly.

At TaxPro Consult and Bookkeeping Services, we help individuals in Charlotte, NC, and across the U.S. stay informed about tax law changes that can affect their filings.

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What is changing with gambling loss deductions?

The new rule, which will take effect for the 2026 tax year, states that:

• Gambling losses are deductible only if you itemize deductions
• Losses still cannot exceed total gambling winnings
• Only 90 percent of gambling losses are deductible

This means that even if your losses exceed your winnings, you may not be able to deduct the full amount of those losses.

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Simple example of the new limitation

Here is a simplified example showing how the new rule works.

A taxpayer named Elena has the following gambling activity:

• Gross gambling winnings of $20,000
• Gross gambling losses of $21,000

Under the new 90 percent limitation:

• Allowable loss deduction equals $18,900
• This is calculated as $21,000 multiplied by 90 percent

Because the deductible loss amount of $18,900 does not exceed the winnings of $20,000, the taxpayer would report:

• Gambling income of $20,000
• Deductible gambling losses of $18,900

The remaining portion of the losses is not deductible.

How this change may affect you

This new limitation may significantly affect taxpayers who:

• Gamble frequently
• Rely on large gambling losses to offset winnings
• Have variable income from gambling activities

Beginning in 2026, a portion of gambling losses will no longer reduce taxable income, which could result in a higher tax bill than in prior years.

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What taxpayers should do now

If you have gambling income or expect to in the future, it is important to:

• Keep detailed records of both winnings and losses
• Maintain receipts, statements, and logs
• Understand how itemized deductions affect your return
• Plan ahead for the reduced deductibility of losses

Proper documentation will be even more important under the new rules.

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DISCLAIMER, TaxPro Consult and Bookkeeping Services

This article is for general education only. It does not constitute tax, legal, or accounting advice. Regulations change, and individual situations differ. You should consult a qualified tax professional who can review your specific circumstances. TaxPro Consult and Bookkeeping Services is not acting as your tax preparer or tax advisor in this content.

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Have questions about gambling income or deductions?

If you live in Charlotte, NC, or anywhere in the U.S., our team at TaxPro Consult and Bookkeeping Services can help you understand how these new gambling loss rules apply to your situation and plan accordingly.

Email us or schedule a consultation for personalized guidance.