If you play poker in the US in 2026, understanding how poker tax regulations impact you is crucial for your bankroll. A new tax change from the One Big Beautiful Bill Act (OBBBA) makes it harder to break even on paper, even when you break even in real life.

The headline rule is simple: from 2026 onwards, you can only deduct up to 90% of your gambling losses against gambling winnings. That sounds like a small tweak, but it can hit grinders hard. Especially high-volume players with thin edges or big swings.

What Changed in 2026 (OBBBA’s 90% Loss Cap)

In previous years, gambling losses could generally offset winnings up to 100% (you still couldn’t claim a net gambling loss overall, but you could often reduce taxable winnings down to £0). In 2026, the new cap means 10% of losses may be disallowed, even if you can prove them.

That’s where the new phrase phantom income comes from.

What “Phantom Income” Means for Poker Players

Phantom income is taxable profit that doesn’t actually exist in your bankroll.

Here’s the easiest example:

• You win $100,000 across the year, but you lose $110,000.
• In real life, you’re down -$10,000 overall.
• Under the new 90% rule, only $90,000 of those losses may be deductible, leaving you with $10,000 taxable income.

That’s a worst-case scenario for breakeven players and small winners. You can end up paying tax even when poker didn’t pay you anything.

Professional vs Amateur: The Decision That Matters Most

To file poker taxes correctly, you need to know whether you’re treated as an amateur gambler or a professional gambler.

If you’re an amateur, poker is considered a hobby. Your winnings are taxable, and your losses may only help if you itemise deductions (instead of taking the standard deduction). This is where many players get stuck paying tax on gross winnings, even when their real profit was small.

If you’re a professional, poker is treated more like a business. Most pros report income and expenses on Schedule C, which allows you to “net” your results earlier, meaning the tax calculation lines up more closely with your real poker profit.

The IRS doesn’t give a single magic rule for pro status, but they do look at factors like your time spent playing, profit motive, expertise, recordkeeping, and whether you rely on poker income.

Why Schedule C Can Be a Big Advantage (Even With SE Tax)

Filing as a pro can be powerful because it allows you to deduct legitimate poker-related expenses. That may include things like tracking software, coaching, study tools, and travel costs when the trip is primarily for poker.

The downside is that pros may owe self-employment tax (15.3%) on net profit, which covers Social Security and Medicare. That can feel steep, but it’s often still better than being taxed on gross winnings as an amateur.

Pros may also qualify for the QBI deduction, which can reduce taxable business income by up to 20% in some situations.

The One Habit That Protects You: Session Logging

In 2026, good records aren’t optional if you want to stay ahead. If you ever need to defend your numbers, you’ll want session logs showing the date, location or site, game type, buy-ins, cash-outs, and net result. Tournaments should be logged individually, while cash games can be logged per sitting or per day as long as you’re consistent.

A simple spreadsheet is enough, but poker tracking apps can make it easier and cleaner.

Don’t Forget Quarterly Taxes

Poker income usually isn’t taxed automatically like a normal job. If you expect to owe at least $1,000, you may need to make quarterly estimated payments to avoid penalties.

This is especially important if you’re moving up stakes, binking a big score, or combining live and online volume.

2026 Rewards Organised Players

The new OBBBA rule makes poker taxes harsher because it limits how much of your losses can offset winnings. That’s how “phantom income” happens . It’s why grinders need to get organised now.

Track every session, understand whether you’re filing as a pro or amateur, and don’t wait until April to figure it out. If you’re playing serious volume or dealing with multiple income streams, a poker-savvy CPA can easily pay for themselves.