If you won big on the Super Bowl, be prepared for potential IRS tax implications. Winnings from sports bets are taxable as ordinary income federally, ranging from 10% to 37% depending on your tax bracket. Platforms like DraftKings issue a Form W-2G for winnings over $600 and may withhold up to 24% for federal taxes on amounts over $5,000.

With sports betting now legal in 40 states, including online options in 30 states and D.C., be aware of potential state and local tax obligations on your winnings. State tax rules for sports betting income can vary significantly, with some states not allowing deductions for gambling losses.

For tax years 2026 and beyond, the One Big Beautiful Bill Act limits deductibility of gambling losses to 90% of winnings. Even if you lose more than you win, you can only deduct a portion of those losses against your winnings. It’s important to understand how this change affects your tax liability on gambling income.

To deduct sports betting losses, you must itemize your deductions and keep records of your winnings and losses. While this can potentially lower your tax bill, it’s crucial to compare your total deductions to the standard deduction to determine the most advantageous option for reducing your tax liability.

Read more at Yahoo Finance: Did you win big betting on the Super Bowl? Here are the taxes you might owe.