Kalshi & Polymarket Taxes for New Yorkers (2026)

The most useful starting point is to separate three questions: What records does the platform provide? How should a particular contract be characterized for federal tax purposes? What follows on a New York return? A market's winning outcome, its settlement rules and a taxpayer's reporting position are not the same thing.

What tax documents does Kalshi provide?

Kalshi's tax-documentation help page says users who meet applicable IRS reporting thresholds may receive Form 1099-INT for interest, Form 1099-MISC for credits or rewards, Form 1099-B for broker transaction proceeds such as crypto transfers, and Form 1099-DA for digital-asset transactions reported by ZeroHash. It separately offers a P&L statement summarizing trading activity, including fees and rebates, calculated using first-in, first-out (FIFO) accounting. The trading information is updated monthly, so a mid-month download may omit recent activity.

Find the statement under Account > Tax Info and select the tax year. A missing 1099 does not settle whether income must be reported: the IRS says most income is taxable unless exempt and should be reported even if no form arrives. Keep your own trade, settlement, transfer, fee and reward records, and reconcile them against the platform's statement.

Why isn't there one simple event-contract tax answer?

Section 1256 provides a 60% long-term / 40% short-term treatment for contracts that actually qualify under that section. The IRS lists qualifying categories in Publication 550 and specifically excludes several types of swaps and similar agreements. Trading on a CFTC-regulated venue alone does not prove that every product qualifies. Nor does the existence of a sports-related contract automatically resolve its tax characterization. Do not put all Kalshi or Polymarket activity into one tax bucket based on a platform label or an online shortcut.

Whether a particular gain or loss is capital, ordinary, within Section 1256 or subject to wagering rules requires a product-specific and taxpayer-specific analysis. This guide does not choose a filing position for you. Bring the exact contract terms, transaction history and any platform tax documents to a licensed tax professional.

Polymarket US is a distinct CFTC-regulated platform. The international Polymarket documentation describes shares collateralized and paid in USDC; digital-asset transactions can create separate record-keeping questions. Do not conflate the international venue and Polymarket US, or assume that Kalshi's documentation policy also describes Polymarket's.

What changes for a New York or NYC resident?

New York State residents calculate a state return using federal income as a starting point, subject to New York's own additions, subtractions, deductions and credits (see the Form IT-201 instructions). New York City residents may also have city resident income tax. The federal treatment and the details of residency and the return matter; there is no responsible one-line rate that applies to every trader's gains. Check the applicable tax-year instructions and get advice for your own circumstances.

If you're comparing the product with a sportsbook ticket, our prediction markets vs. sports betting guide explains the structural difference. It does not establish that the two are taxed differently in every case. For platform-specific record keeping, see how to withdraw from Kalshi. The New York legality guide and Is Kalshi legal in New York? address access and the contested regulatory picture, not a tax classification.

Why gambling-loss rules shouldn't be applied casually

The IRS says casual gambling winnings are taxable and generally reports them separately from itemized gambling losses (Topic 419). For tax years beginning in 2026, a statutory change limits the wagering-loss deduction to 90% of losses and no more than wagering gains (IRB 2026-19). That rule matters if the transactions are wagering transactions for tax purposes. This article does not conclude that every prediction-market contract is one. Do not apply a gambling-loss worksheet to event contracts merely because the subject is a game.

A practical record-keeping checklist

• Save the exact market question and settlement terms, including any amendments.
• Export opening and closing trades, prices, quantities, dates, fees, rebates and settlement proceeds.
• Keep interest, credits and rewards distinct from trading results; compare the records with any forms issued.
• Identify which platform and product generated each transaction. Keep any digital-asset transfers separately documented.
• Download Kalshi's year-end P&L and reconcile it with your own ledger. Kalshi says its monthly data may lag within the month.

The honest bottom line

The P&L is useful evidence, not a ruling on how to file. A 1099 category can describe a payment or transfer without classifying every event-contract gain. Preserve your records and have a licensed tax professional review the actual products and your residency before filing. This is general information, not individual tax advice.

Frequently asked questions

Are Kalshi profits taxable if I don't receive a 1099?

The absence of a form does not make income exempt. The IRS says most income is taxable unless specifically exempt and should be reported even without a reporting form. Ask a tax professional how your particular net activity should be reported.

Does Kalshi send a 1099-B for event-contract trading?

Kalshi's current help page lists Form 1099-B for broker transaction proceeds such as crypto transfers, and separately describes a trading P&L statement. It does not say every event-contract trade appears on a 1099-B. Check the forms and P&L actually available in your account.

Does Section 1256's 60/40 rule apply to Kalshi contracts?

Do not assume it does. Section 1256 has defined qualifying categories and exclusions. Whether a specific product qualifies is a question for a licensed professional reviewing its terms and your facts.

Does New York City add tax?

New York City resident income tax can apply to city residents in addition to New York State tax. Residency, federal treatment and the applicable year's instructions affect the calculation.

Is Polymarket US the same as the international platform for tax records?

No. They are distinct platforms. Do not assume the international platform's USDC mechanics or Kalshi's tax-document policy describe your Polymarket US account. Retain your actual account records and ask a professional about any digital-asset transactions.

Is this tax advice?

No. Content is provided for informational purposes only and does not constitute financial, legal, gambling, investment or tax advice. Consult a licensed tax professional about your own situation.