On Tuesday, the US Senate passed President Trump’s “big beautiful bill” via a tie-breaking vote by Senate President J.D. Vance. The bill is now in the hands of the US House for further debate and potential acceptance.
Highlights of the bill include no taxes on tips, a raise in the child tax credit, new restrictions on food stamps, and changes to Medicaid. Also buried in the language of H.R. 1 are new requirements regarding how US-based gamblers will report and pay taxes on their winnings.
Currently, each US state has different requirements for how taxes are collected on gambling winnings. Most regions consider it income.
All gambling winnings in the United States are subject to federal income tax. Winnings are taxed at a rate that ranges from 10% to 37%, depending on your total income. All winnings must be reported on your tax return, even if no tax is withheld. Gambling losses can be deducted only if you itemize deductions and only up to the amount of your winnings.
If the current budget bill passes, the following changes in how you report your gambling winnings taxes will occur:
- The Senate proposal would establish a permanent cap on gambling loss deductions, allowing the offset of only up to 90% of their winnings, as opposed to the full amount permitted under current law.
- Amateur gamblers who break even will come out at an annual loss of 10% due to a 90% limit placed on claims for gambling losses.
- For professional gamblers, the new proposal means they can only deduct up to 90% of their losses and business expenses from their gambling winnings.
The House version of the bill does not contain this language, but there is always the chance that it will be adopted in sweeping fashion following agreement on other, more pressing issues contained in H.R. 1.
If the House includes additional changes before passage, it will undergo one more round in the Senate before heading to the president’s desk for signature.
Those in opposition to the bill include former Trump ally and Department of Government Efficiency head Elon Musk.
Every member of Congress who campaigned on reducing government spending and then immediately voted for the biggest debt increase in history should hang their head in shame!
And they will lose their primary next year if it is the last thing I do on this Earth.
— Elon Musk (@elonmusk) June 30, 2025
Frustrated with the wasteful spending and the escalation of the debt ceiling included in the bill, Musk is now threatening to create an American Party. This new political affiliation would stand apart from the Republicans and Democrats.
President Trump is hopeful that the big beautiful bill will be signed into law by July 4th.
Sources: H.R. 1 Text | Taxable Talk | Matt Glantz Twitter/X | CNN
