The US House Ways and Means Committee has advanced legislation that would restore the full federal tax deduction for gambling losses from the 2026 tax year.
Committee members approved the wider tax package by 38 votes to five. Its gambling provision would allow taxpayers to deduct 100% of losses up to the value of their winnings, reversing a restriction introduced last year.
The current rule, which took effect at the beginning of 2026, limits deductible gambling losses to 90%. It can leave players facing a federal tax liability despite making no net profit.
A player recording US$100,000 in winnings and an equal amount in losses, for example, can deduct only US$90,000 and may be taxed on the remaining US$10,000.
Nevada lawmakers have led efforts to overturn the restriction because of its potential effect on professional gamblers and high-volume customers. Previous attempts to secure an immediate reversal failed to progress through Congress.
“Gaming is central to our economy, and workers and families throughout my district depend on it,” said Steven Horsford, the Democratic representative for Nevada’s fourth congressional district.
The provision was included in broader bipartisan legislation addressing the taxation of cryptocurrencies and other digital assets. Its inclusion in a package that has cleared committee marks further progress than the standalone repeal measures introduced previously.
The legislation must still secure approval from the full House of Representatives and Senate before being sent to the president. The timing of any congressional vote remains uncertain.
The 90% deduction limit will remain in force unless the legislation is enacted. The proposed restoration would apply retrospectively to the 2026 tax year, ensuring gambling losses could again be deducted in full when taxpayers file their federal returns.
Tags: US Gambling Tax, US House and Means Committee, Nevada, Steven Horsford
