Losses net directly against winnings without itemizing. Your state result can differ from your federal one.
New Jersey lets you report gambling on a net basis without itemizing — you report what you actually came out ahead, not your gross wins. New Jersey's netting is independent of the federal 90% loss limitation, so the state calculation can be more favorable than the federal one for the same year.
The same year everywhere: win $50,000, lose $48,000, walk away up $2,000. In New Jersey, NJ taxes only the $2,000 you actually kept — about $127 at up to 10.75%.
New Jersey's gambling-loss treatment differs from the federal rule. Losses net against winnings from all sources — lottery included — to a floor of zero, without itemizing, and New Jersey did not adopt the federal 90% loss cap.
Source: NJ Division of Taxation — NJ-1040 instructions (net gambling winnings)
Illustrative calculator — not product output. This is your gross-reporting number. It is not your session figure.
Under IRS guidance and case law (Chief Counsel Advice AM 2008-011; Notice 2015-21, a proposed safe harbor; Shollenberger v. Commissioner; Park v. Commissioner), a casual gambler's income may be measured by session rather than by adding up Forms W-2G. TaxBet documents that computation for you and your tax professional to review. Measured that way, your winnings figure is often smaller than the gross totals above. We can't tell you what your session figure is from two inputs. It takes your actual transaction history.
Run my transactionsIt is a structural quirk, not a decision most legislatures made on purpose. Gambling winnings enter your return above the line — they land on Schedule 1 and flow straight into your adjusted gross income. Losses come off below the line, as an itemized deduction on Schedule A.
Most states start their own calculation from your federal AGI and then apply their own rules about deductions. The winnings arrive automatically. The losses only arrive if the state chooses to let them. Ten states decoupled from the federal code in a way that means they never do.
The result has a name in the tax literature: phantom income. Money you are taxed on that you never kept.
Under IRS guidance and case law (Chief Counsel Advice AM 2008-011; Notice 2015-21, a proposed safe harbor; Shollenberger v. Commissioner; Park v. Commissioner), a casual gambler's income may be measured by session rather than by adding up Forms W-2G. TaxBet documents that computation for you and your tax professional to review. You report the net result of each session. Losing sessions don't become a deduction you have to itemize — they reduce the winnings figure you report in the first place.
That distinction matters most in a state like New Jersey, because a smaller reported winnings figure flows through every downstream calculation.
The catch is records. The session method requires contemporaneous, transaction-level detail — which is exactly what your operator exports contain and what almost nobody reconciles by hand.
Upload your operator history. TaxBet reconstructs your sessions, computes the session-based figure, and produces the supporting worksheets for your tax professional's review.
Get startedAlso in this tier (deduction without itemizing): Pennsylvania → · West Virginia →