Tested Templates & Toolstested before it ships

● Free tool · taxes

Gambling loss deduction calculator (2026): the OBBBA 90% rule and "phantom income"

Starting with the 2026 tax year, the One Big Beautiful Bill Act caps the itemized deduction for gambling losses at 90% of those losses (still capped at your winnings, as before) -- down from 100%. That 10% haircut can create taxable "phantom income" even when you broke even or lost money overall. Enter your total gambling winnings and losses for the year to see the pre-2026 deductible loss, the 2026+ deductible loss, the phantom income the haircut creates, and whether itemizing still beats the standard deduction once this is in the mix.

✓ Checked26 U.S.C. §165(d), as amended by the One Big Beautiful Bill Act (P.L. 119-21, §70114), and Treasury's proposed regulation at 26 CFR §1.165-10 (REG-113229-25, 91 FR 20599, April 17, 2026)
Taxable gambling income this year (current 90% rule)–
Gambling winnings (taxable income either way -- Schedule 1, line 8b)
Gambling losses for the year
Deductible loss under the pre-2026 rule (100%, capped at winnings)
Deductible loss under the 90% rule (2026+, current law)
Phantom income created by the 90% haircut (taxable, even with no economic gain)
Other itemized deductions
Itemized total under the pre-2026 rule
Itemized total under the 90% rule
Your standard deduction
Itemize vs. standard -- pre-2026 rule
Itemize vs. standard -- 90% rule (current law)
For comparison: taxable gambling income under the pre-2026 rule

Gambling losses are only deductible at all if you itemize on Schedule A -- if you take the standard deduction, your full winnings are taxable with no offset, same as always, and the 90% rule changes nothing for you. If you're married filing jointly, enter the household's combined winnings and combined losses for both spouses together -- Treasury's proposed regulation computes the joint-return limit on the combined figures, not spouse by spouse. "Winnings" and "losses" here should already be netted the way the IRS has long required for session-based play (e.g. a day where you fed $500 into a slot machine and cashed out $520 is a $20 session gain, not $500 of winnings and $480 of losses) -- see the gambling loss deduction guide for details. There's an active, bipartisan effort in Congress (the FAIR BET Act / a fix folded into H.R. 10357) to roll the 90% rule back to 100%, but as of this calculator's last check it has not passed either chamber -- the 90% rule shown here is current law. Not tax advice.

How it works

For tax years starting in 2026, the OBBBA caps the itemized deduction for gambling losses at 90% of those losses, still capped at your winnings as before (26 U.S.C. §165(d), as amended by P.L. 119-21 §70114). Before 2026 it was simply the smaller of 100% of losses or winnings. The 90% haircut can create "phantom income" -- real tax on money you never actually kept -- for anyone whose losses are at or below their winnings for the year, and it only matters if you itemize. More in the gambling loss deduction guide, including six worked examples and the itemizing-flip "double hit" case.

Worked examples