- Bettors who record over $2,000 in sports betting winnings in 2026 will be required to submit one or more W-2G forms to the IRS to report their winnings.
- The rule is new in 2026 and the threshold will be adjusted yearly for inflation.
LAS VEGAS – While sports betting is a rapidly expanding market, there are a few legal aspects that many overlook, taxes being one of the most prominent.
Here’s an overview of the sports betting tax rules and how to report winnings in 2026.
General Requirements
Federal tax laws require all income to be reported, regardless of where it came from, so all sports betting winnings should be reported to the IRS.
Sports betting winnings must be filed as income on federal income tax returns, along with any money earned from casinos, horse racing, or any other kind of gambling.
However, bettors can take a gambling loss deduction against their winnings, deducting up to 90% of their losses against winnings. This rule changed in 2026, as bettors could deduct 100% of their losses prior to this year.
Bettors must keep track of their own losses in order to claim them in their tax reports.
New $2,000 W-2G Rule
A new rule instituted this year requires anyone who earned $2,000 or more through sports betting to file a W-2G form.
The form covers all sports betting activity, including winnings, wager types, and the date of each bet.
Bettors can receive multiple W-2G forms from different legal sports betting sites, covering their activity on each platform.
In each following year, the threshold requiring the filing of a W-2G will be adjusted for inflation.
Tax Withholdings
Most sports betting platforms have a withholding rate of 24% on sports betting winnings over $5,000 in addition to state taxes.
State tax rates and thresholds on sports betting winnings vary, with some states following the federal threshold of $5,000, while others can go as low as just $600.
Some of these withholdings may be able to be recovered, depending on the bettor’s income and tax rates.
