Phantom Income Calculator
The 2026 OBBBA limits gambling loss deductions to 90%, creating taxable "phantom income" you never actually earned. See how much the new law affects you.
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This is income you'll be taxed on that you never actually earned.
Phantom income is calculated as the difference between your taxable income under 2026 rules vs 2025 rules. Under the OBBBA, you can only deduct 90% of gambling losses (capped at your winnings), creating taxable income that doesn't correspond to actual profit.
What Is Phantom Income from Gambling?
Phantom income is taxable income created by the 2026 OBBBA (One Big Beautiful Bill Act) 90% gambling loss deduction cap. Under prior law, if you won $50,000 and lost $50,000, you owed zero tax. Under the new law, you can only deduct $45,000 (90% of losses), leaving $5,000 in taxable "phantom income" — income you never actually earned but must pay taxes on.
Who Is Affected by the OBBBA 90% Cap?
Every gambler who itemizes deductions is affected — recreational bettors, professional gamblers, and even break-even players. The law applies to all forms of gambling: sports betting, casino games, poker, lottery, and horse racing. Professional gamblers are also affected because the OBBBA reclassifies their business expenses as Section 165(d) losses subject to the same 90% cap.