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Yes. Sports betting winnings are taxable under U.S. federal law, and you must report them even if your sportsbook does not send you Form W-2G. A W-2G is a payer-reporting form, not a threshold below which winnings become tax-free. The rules below cover federal taxes; state and local treatment depends on where you live and bet.
How to report sports betting winnings on a federal return
For a casual bettor, the IRS directs gambling winnings to Form 1040 or Form 1040-SR with Schedule 1. IRS Publication 525 (2025) specifies Schedule 1, line 8b. Include winnings even when they are not reported on a W-2G; the IRS states that gambling winnings are fully taxable and must be reported.
If a sportsbook issues a W-2G, include the winnings shown on it with your other gambling winnings. If federal income tax was withheld and shown on that form, Publication 525 says to report the withholding on Form 1040 or 1040-SR, line 25c. A form from the sportsbook does not replace your responsibility to report all winnings.
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Do I have to report winnings if I did not get a W-2G?
Yes. The W-2G rules determine when a payer must report certain winnings or withhold tax; they do not determine whether your winnings are taxable. Report winnings whether or not you receive the form.
What Form W-2G and withholding mean
W-2G reporting and federal withholding apply to certain categories of winnings. The applicable criteria depend on the wager type and amount, and generally on the ratio of winnings to the wager. The IRS’s 2026 Publication 505 describes a 24% flat withholding rate in specified cases, including cases involving certain wagering pools, sweepstakes, and lotteries where winnings exceed $5,000, and certain other wagers with proceeds at least 300 times the amount bet. These are criteria for withholding in specified categories—not a general sports-betting tax-free allowance or a complete list of reporting requirements.
Withholding is a payment toward tax, not the final calculation of what you owe. Your final federal tax depends on your return as a whole. The IRS says estimated tax may be needed when winnings are not subject to withholding; consider your overall tax situation rather than assuming a sportsbook’s withholding settles the bill.
How gambling losses affect a 2026 return
Do not subtract losses from winnings when entering gambling income. For casual gamblers, losses are handled separately: the IRS says they may be deducted only if you itemize on Schedule A, and the deductible amount cannot exceed reported gambling income under the longstanding general rule.
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1Scan for outdated or missing drivers - takes under a minute2Repair Windows errors before they cause bigger problems3Fix the driver behind crashes, sound loss and screen glitchesFor tax year 2026, IRS Publication 505 adds a further limit: the deduction is capped at the lesser of 90% of gambling losses or gambling winnings. This is a rule for 2026 returns, not a rule to apply retroactively to earlier tax years. Keep winnings reported as income and determine any eligible loss deduction separately.
Records to keep for sports bets
The IRS recommends keeping an accurate diary or similar record of gambling activity. For sports betting, record details that let you reconcile your activity and substantiate any loss deduction:
- Date and type of wager or activity.
- Sportsbook or other gambling establishment, and its location.
- Amounts won and lost.
- Other people present, where relevant.
Keep supporting evidence as well. IRS examples include W-2G and Form 5754, wagering tickets, canceled checks, credit records, bank withdrawal records, and statements or payment slips from a gambling establishment. For app-based betting, save downloadable account and transaction statements alongside your diary or spreadsheet so the records can be reconciled. A ledger alone is not a substitute for supporting documents.
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Casual bettor or gambling as a trade or business
The guidance above is for casual bettors. The IRS says a person carrying on gambling as a trade or business reports gambling income on Schedule C rather than using the casual-gambler Schedule 1 treatment. Whether a bettor’s activity qualifies as a trade or business depends on the individual facts. Publication 525’s discussion of the professional-gambling loss limitation is expressly framed for tax years 2018 through 2025, so do not assume that wording governs a 2026 return without checking current IRS instructions.
State and local taxes
This federal overview does not settle state or local tax treatment. Those rules depend on the bettor’s jurisdiction, and the applicable state and local requirements should be checked separately.
Nonresident aliens
Nonresident aliens who must file for U.S.-source gambling winnings generally use Form 1040-NR and Schedule NEC, according to IRS Topic 419. The IRS says they generally cannot deduct gambling losses unless an exception applies. This is a separate filing situation from the U.S.-resident guidance above.
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