WAGER Act of 2025
The Wager Act of 2025 (H.R. 4630) would modify the federal tax treatment of wagering losses by altering the rule in Internal Revenue Code section 165(d)(1). The bill appears to strike the current restriction that limits wagering losses to the amount of gains in a given tax year and replace it with language that would allow wagering losses to be deducted for any taxable year. In other words, if enacted, taxpayers could potentially deduct wagering losses without the prior cap tied to wagering gains, for each taxable year beginning after December 31, 2025. The bill is titled the Winnings And Gains Expense Restoration Act of 2025 (WAGER Act of 2025) and was introduced by Representative Barr and referred to the Ways and Means Committee. Note: The precise effect rests on the exact statutory phrasing and how it is interpreted in context. The summary above reflects the intent suggested by the text: removing the prior year-based limitation on wagering losses, with an effective date for post-2025 tax years.
Key Points
- 1Core change: Amends Section 165(d)(1) to remove the existing annual limit on wagering losses being deductible only to the extent of wagering gains, replacing it with language that allows wagering losses to be deductible for any taxable year.
- 2Short title: The act is to be cited as the Winnings And Gains Expense Restoration Act of 2025 or the WAGER Act of 2025.
- 3Effective date: Applies to taxable years beginning after December 31, 2025.
- 4Legislative action: Introduced in the House by Rep. Barr on July 23, 2025; referred to the Committee on Ways and Means.
- 5Policy and revenue impact: The change would reduce federal revenue by expanding the deductibility of wagering losses, with greatest impact on taxpayers who incur substantial wagering losses in a given year.