No, gambling losses cannot be carried forward to a future tax year. Federal law lets you deduct losses only against winnings from the same calendar year, and anything left over is gone for tax purposes. Starting with the 2026 tax year, a new rule makes the picture worse: only 90 percent of your losses are deductible, even when losses match or exceed winnings.1Office of the Law Revision Counsel. 26 U.S. Code 165 – Losses
Why Losses Can’t Move to Another Year
The rule sits in Section 165(d) of the Internal Revenue Code, which caps your loss deduction at your total gambling gains for the taxable year.1Office of the Law Revision Counsel. 26 U.S. Code 165 – Losses Business and investment losses often carry forward or backward, but gambling losses are locked to the year they happened.
Say you win $5,000 this year and lose $30,000. You can deduct $5,000. The other $25,000 in losses disappears. You cannot save any part of it for a future jackpot.2Internal Revenue Service. Topic No. 419, Gambling Income and Losses There is no exception for unusually large losses, multi-year losing streaks, or the type of gambling involved. A $200 scratch-off habit and a six-figure poker year are treated the same way.
You also cannot net wins against losses and report the difference. Total winnings go on Schedule 1 in full. The allowable loss deduction goes on Schedule A as a separate line, capped at your winnings for the year.2Internal Revenue Service. Topic No. 419, Gambling Income and Losses
The New 90 Percent Cap Starting in 2026
The One Big Beautiful Bill Act, signed on July 4, 2025, added a second restriction on top of the same-year rule. Beginning with the 2026 tax year, only 90 percent of your gambling losses are deductible, even when winnings are high enough to absorb the full amount.1Office of the Law Revision Counsel. 26 U.S. Code 165 – Losses
Consider a break-even year: $100,000 in winnings and $100,000 in losses. Under prior rules, the $100,000 in losses fully offset the $100,000 in winnings, so nothing was taxable on the gambling activity. Under the new rule, you can deduct only $90,000. The remaining $10,000 becomes taxable income even though you didn’t actually come out ahead. Tax professionals are calling this phantom income, and it hits break-even gamblers hardest.
If your losses far exceed your winnings, the 90 percent cap may not change the outcome. Win $10,000 and lose $50,000, and 90 percent of your losses is $45,000, but the same-year rule still limits you to $10,000. The binding constraint there is the same-year cap. The 90 percent rule matters most when losses are close to or equal to winnings.
You Only Get the Deduction if You Itemize
Even when losses are within your winnings, you can claim them only by itemizing on Schedule A. Take the standard deduction and you get zero benefit from your losses, no matter how well-documented they are.2Internal Revenue Service. Topic No. 419, Gambling Income and Losses
For 2026, the standard deduction is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household.3Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Itemizing only pays off when your total itemized deductions clear those figures. Many gamblers without a mortgage or large medical bills do better with the standard deduction, which leaves their gambling losses doing them no good. Winnings remain fully taxable either way.
Records You Need to Support the Deduction
The IRS puts the burden of proof on you. If you claim gambling losses and get audited, you need documentation that shows winnings and losses with specificity. Vague estimates don’t work, and reconstructing a year of activity after the fact rarely holds up.2Internal Revenue Service. Topic No. 419, Gambling Income and Losses
Keep a contemporaneous diary or log for each gambling session with the date, the type of activity, the name and location of the establishment, and the amount won or lost. Save every supporting document: W-2G forms, player card statements from casinos, betting app transaction histories, credit card records tied to wagers, and any tickets or receipts.
Hold on to these records for at least three years from the date you file, which matches the general statute of limitations for the IRS to assess additional tax.4Office of the Law Revision Counsel. 26 U.S. Code 6501 – Limitations on Assessment and Collection If you underreport income by more than 25 percent, the IRS gets six years, so keeping records longer than three is the safer default.
Professional Gamblers Don’t Get a Carryforward Either
Some taxpayers qualify as professional gamblers by treating gambling as a full-time trade or business pursued in good faith and with regularity, primarily to earn a living. Professional status changes how you file but does not unlock loss carryforwards.
Professionals report income and expenses on Schedule C instead of Schedule 1 and Schedule A. That lets them deduct business costs such as travel, software subscriptions, and similar overhead against gambling income. The same core limitation still applies: total gambling deductions, including business expenses, cannot exceed gambling winnings for the year.1Office of the Law Revision Counsel. 26 U.S. Code 165 – Losses The statute defines “losses from wagering transactions” to include any deductible expense incurred in carrying on a wagering activity, so a professional gambler cannot generate a net business loss from gambling to offset wages, investment income, or other earnings.
The 90 percent rule applies to professionals too. A professional who wins $200,000 and has $200,000 in combined losses and business expenses can deduct only $180,000, which leaves $20,000 in taxable phantom income. The real advantages of professional status are skipping the itemization requirement and deducting overhead costs that recreational gamblers can’t claim at all.
State Rules Can Be Harsher
Federal rules are only half the picture. State income tax treatment of gambling losses varies, and several states are less generous than the IRS. At least nine states, including Connecticut, Illinois, Indiana, and Ohio, allow no deduction for gambling losses on the state return. In those states, your full winnings are taxable at the state level regardless of how much you lost.
Other states follow federal rules and allow the deduction up to winnings, but only if you itemize on the state return. A handful of states have no income tax at all, which makes the question moot. Check your state’s specific treatment before filing. A state tax bill on winnings you thought were offset by losses is one of the more common and avoidable surprises in this area.