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Yes. For U.S. federal income tax purposes, sports betting winnings are taxable income, and you must report them even if the sportsbook does not send you Form W-2G. A W-2G is about payer reporting and, in some cases, withholding—not a threshold below which winnings become tax-free. State and local rules vary by jurisdiction.
How to report sports betting winnings on a federal return
For a casual bettor, the IRS directs gambling winnings to Form 1040 or 1040-SR with Schedule 1. IRS Publication 525 (2025) specifies Schedule 1, line 8b. If a W-2G reports winnings, include those winnings; report any federal income tax withheld on Form 1040 or 1040-SR, line 25c. Winnings that do not appear on a W-2G still belong in income. See IRS Topic No. 419 and Publication 525.
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These line references are based on the cited 2025 publication. Check the instructions for the tax year you are filing, since form lines and instructions can change.
What a W-2G does—and does not—mean
A sportsbook issues Form W-2G for certain winnings or when federal withholding applies. Whether it must issue the form depends on the type and amount of wager and, generally, the ratio of winnings to the wager. The form’s thresholds do not determine whether winnings are taxable: the IRS says all gambling winnings must be reported, including sports betting winnings not reported on a W-2G. The IRS explains the form and criteria on its Form W-2G information page.
Withholding criteria cited for 2026
IRS Publication 505 (2026) describes a 24% flat withholding rate in specified cases. It gives criteria that include proceeds of more than $5,000 for specified wagering pools, sweepstakes, and lotteries, and proceeds at least 300 times the amount bet for certain other wagers. These are category-specific withholding rules, not a general tax-free allowance or a complete description of every sportsbook reporting situation. Consult the IRS publication for the applicable category and details.
Withholding is a payment toward tax, not necessarily the final amount due. Your total tax depends on your return as a whole. If winnings are not subject to withholding, estimated tax payments may be needed; Publication 505 (2026) discusses estimated tax and gambling winnings.
How gambling losses affect the return
Do not subtract losses from winnings and report only the net amount as gambling income. For a casual bettor, the IRS treats winnings as income and losses as a separate deduction. The usual requirements are that you itemize deductions on Schedule A and substantiate the losses; losses cannot exceed reported gambling income under the longstanding general rule. That deduction does not erase the obligation to report winnings.
The federal loss cap for tax year 2026
For tax year 2026, Publication 505 (2026) states that the gambling-loss deduction is limited to the lesser of 90% of gambling losses or gambling winnings. This is a 2026 rule; do not apply it retroactively to an earlier tax-year return. Because the deduction is subject to itemizing and documentation requirements, keep the winnings and losses separately supported in your records.
Records to keep for sports bets
The IRS recommends an accurate diary or similar record of gambling activity. For sports betting, log each relevant date, wager or activity, sportsbook or location, amounts won or lost, and other people involved where relevant. Keep supporting evidence such as W-2Gs, Form 5754 where applicable, wagering tickets, canceled checks, credit records, bank withdrawals, and sportsbook payment statements. The IRS describes recordkeeping in Publication 529.
For app-based betting, save downloadable transaction histories and account statements as well as your log. Those records make it easier to reconcile wagers and payouts and support the amounts you report or claim.
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Casual bettor versus gambling as a business
The instructions above describe a casual bettor. The IRS says gambling carried on as a trade or business is reported on Schedule C rather than as casual gambling income on Schedule 1. Whether a person’s activity qualifies as a trade or business depends on the facts; there is no classification determination here. Publication 525’s discussion of the professional-gambler loss limitation is specifically framed for tax years 2018 through 2025, so do not assume that wording governs a 2026 return without checking current IRS instructions.
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State, local, and nonresident rules
This guide covers the federal baseline for U.S. residents. State and local tax treatment depends on where you live and other jurisdiction-specific facts, which are not resolved here. Nonresident aliens with U.S.-source gambling winnings who must file generally use Form 1040-NR and Schedule NEC; the IRS says they generally cannot deduct gambling losses unless an exception applies. See IRS Topic No. 419 for that separate situation.
Frequently Asked Questions
Do I have to report sports betting winnings if I didn’t get a W-2G?
Yes. The IRS requires reporting gambling winnings, including sports betting winnings, even when no W-2G is issued.
Are sports betting losses automatically subtracted from winnings?
No. Casual bettors report winnings as income and may claim eligible, documented losses separately if they itemize; for tax year 2026, the deduction is capped at the lesser of 90% of losses or winnings.
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