Poker winnings are taxable income in the United States whether or not a card room sends a Form W-2G. The IRS says gambling winnings are fully taxable and belong on Schedule 1 of Form 1040. Losses are deductible only if you itemize, and for tax years beginning after December 31, 2025, only 90 percent of losses count.
Verified on October 20, 2026. General information, not legal or tax advice; a qualified tax professional can apply these rules to a specific return.
How does the IRS treat poker winnings?
IRS Topic 419 describes gambling winnings as fully taxable. The category covers lotteries, raffles, sports betting, horse races and casino games, and it includes the fair market value of non-cash prizes such as cars and trips. Casual gamblers report winnings on Form 1040 or 1040-SR through Schedule 1, including amounts that never appeared on a Form W-2G.
That last point matters for poker players. A Form W-2G is a payer’s information return, not the source of the tax obligation. Net results from tournament play, live sessions and online sites all fall under the same reporting duty, and Topic 419 notes that winnings may also trigger estimated tax (see IRS Publication 505).
The IRS also expects records. Topic 419 says a taxpayer should keep an accurate diary or similar record and be able to produce receipts, tickets, statements or other documents showing both winnings and losses. Players who also track results for bankroll and strategy review already hold most of that data.
When does a poker room issue Form W-2G?
The Instructions for Forms W-2G and 5754 (revised January 2026) list five categories of reportable gambling winnings: horse racing, dog racing and jai alai; sweepstakes, wagering pools and lotteries; bingo, keno and slot machines; poker tournaments; and sports wagering. Ordinary cash-game sessions are not one of the listed categories, although the income remains taxable.
For poker tournaments, the instructions say the payer files Form W-2G for each person paid winnings that meet or exceed the applicable reporting threshold, reduced by the wager or buy-in, from each tournament the payer sponsored. Results from other tournaments during the year are not combined when testing the threshold.
The same instructions state that the minimum threshold for payments made in calendar year 2026 is $2,000, and that it will be adjusted for inflation in later years. The instructions do not print a separate dollar figure for poker tournaments; they refer readers to Publication 1099 and the IRS inflation-adjustment page for the threshold that applies to each type of winnings.
| Category (IRS instructions, Rev. 01/2026) | What triggers a Form W-2G | Withholding rule stated by the IRS |
|---|---|---|
| Poker tournaments | Net winnings (prize minus buy-in) meeting or exceeding the applicable reporting threshold, tested per tournament | No regular gambling withholding when Form W-2G is filed and a copy is given to the winner; 24% backup withholding on the full amount if the winner gives no TIN |
| Bingo, keno and slot machines | Winnings meeting or exceeding the applicable reporting threshold (keno is reduced by the wager) | Regular gambling withholding does not apply |
| Sweepstakes, wagering pools and lotteries | Form W-2G required when the winnings are subject to federal income tax withholding | 24% regular withholding when winnings minus the wager are more than $5,000 |
Regular gambling withholding is 24 percent (31.58 percent for certain non-cash payments), and backup withholding is also 24 percent. A payment already subject to regular withholding is not subject to backup withholding.
Are poker winnings taxable if no Form W-2G arrives?
Yes. Topic 419 states that all winnings are reported on Schedule 1, including winnings not reported on a Form W-2G. Net winnings below a reporting threshold simply mean the payer has no filing duty; the player’s duty is unchanged. Because Topic 419 says all winnings are reported, the same Schedule 1 treatment applies to winnings from any source, including offshore poker sites.
Nonresident aliens with US-source gambling winnings file Form 1040-NR with Schedule NEC. Topic 419 adds that, generally, nonresident aliens who are not residents of Canada cannot deduct gambling losses.
How are poker losses deducted, and what changed in 2026?
Under Topic 419, gambling losses are deductible only if the taxpayer itemizes on Schedule A (Form 1040) and keeps records. They are claimed as an other itemized deduction, and they cannot exceed the gambling income reported on the return. Publication 529 adds that losses include the actual cost of wagers and that winnings cannot be reduced by losses before they are reported.
Congress changed the rule in Public Law 119-21 (the One Big Beautiful Bill Act), section 70114. Internal Revenue Code section 165(d) now reads that the deduction for wagering losses equals 90 percent of the losses for the year and is allowed only to the extent of gains from wagering transactions for the year. The change applies to taxable years beginning after December 31, 2025, and it covers casual and professional gamblers alike, according to the Congressional Research Service.
| Illustrative case (arithmetic from the statute) | Before 2026 rule | Tax years beginning after Dec. 31, 2025 |
|---|---|---|
| $10,000 winnings, $10,000 losses, itemizing | Losses up to $10,000 deductible; net taxable gambling income $0 | 90% of $10,000 = $9,000 deductible; $1,000 of net taxable gambling income despite breaking even |
| $10,000 winnings, $4,000 losses, itemizing | $4,000 deductible | 90% of $4,000 = $3,600 deductible |
Publication 529 is dated December 2020, so its wording on deducting losses up to the amount of winnings predates the 90 percent limit. The Treasury Department and IRS published proposed regulations (REG-113229-25) in the Federal Register on April 17, 2026. They would restate the wagering-loss deduction at 90 percent of losses, limited to gains, for taxable years beginning after December 31, 2025, and they would apply updated reporting and withholding rules to payments made on or after January 1, 2026. Proposed rules are not final, and the notice does not say taxpayers may rely on them before finalization. Members of Congress have introduced legislation, such as H.R. 6985, that would restore the full deduction; the statute text reviewed on the verification date still reads 90 percent.
What should poker players do at filing time?
- Total all winnings for the year, not only the amounts shown on a Form W-2G.
- Decide whether itemizing makes sense once the 90 percent limit is applied to recorded losses.
- Keep session dates, buy-ins, cash-outs and statements so that both sides of the ledger can be shown on request.
- Check Form W-2G boxes against personal records; the IRS form instructions say to attach Copy B to the return if box 4 shows withholding.
- Review IRS Publication 505 if large winnings may require estimated tax payments.
A large single-tournament payout, such as one at a World Series of Poker event, is the situation the net-of-buy-in Form W-2G test addresses. Readers comparing where to play can start with the poker sites guide.
Sources
- IRS Topic No. 419, Gambling Income and Losses (page reviewed September 24, 2026)
- IRS Instructions for Forms W-2G and 5754 (Rev. 01/2026)
- IRS Publication 529 (12/2020 revision)
- Federal Register, 91 FR 20599, proposed rule REG-113229-25 (April 17, 2026)
- 26 U.S. Code section 165(d), as amended by Pub. L. 119-21 section 70114
- Congressional Research Service, Tax Provisions in P.L. 119-21
- Rep. Max Miller, FULL HOUSE Act (H.R. 6985) announcement
- National Council on Problem Gambling, 1-800-MY-RESET announcement (January 29, 2026)
Responsible gambling
Gambling should stay recreational and within a set budget. Anyone concerned about their play, or a family member’s, can reach the National Problem Gambling Helpline by calling or texting 1-800-MY-RESET (1-800-697-3738); the NCPG says the service is free, confidential and available 24/7, and that its earlier access point 1-800-522-4700 remains active. Players must be of legal age in their state.
