Are Kalshi Fees Tax Deductible? How Trading and Card Fees Change Your Numbers

Kalshi trading fees aren't a separate tax deduction, but you still get the value of them, because they reduce your gain or increase your loss. Kalshi says its annual P&L figure already includes fees and rebates, so don't subtract them again. Card deposit fees are less clear, because they aren't tied to a contract. Under gambling treatment, fees get swept into losses and face the 90% limit from 2026.

OddsFile is software, not tax advice. The IRS has not issued guidance on how prediction-market contracts are taxed. This article explains the options and the sources behind them; a tax professional can tell you which position fits your situation.

What Kalshi charges

From Kalshi's fee schedule, dated July 2026, and its fees help page:

Fees change, so check the current schedule.

As an example, 100 contracts at $0.60 cost 0.07 × 100 × 0.60 × 0.40 = $1.68, the same worked figure the schedule shows. The fee peaks at 50 cents and shrinks toward either extreme.

Trading fees by treatment

IRS Topic 703 treats basis as what you paid, including purchase costs, and Topic 429 says that for traders, commissions and costs of acquiring or disposing of positions aren't deductible but must be used to figure gain or loss. Event contracts aren't named, but capital treatment follows the same logic.

Don't count them twice

Kalshi says the PnL figure "includes fees and any rebates". So:

Subtracting them again understates your income, which can be a problem if the IRS ever looks. If you've rebuilt your own numbers from fills, check whether your fill prices already include fees, so that your total ties to Kalshi's.

Worked example

You buy 1,000 contracts at $0.40, for a $400 cost and a fee of 0.07 × 1,000 × 0.40 × 0.60 = $16.80. Later you sell at $0.70, with a fee of 0.07 × 1,000 × 0.70 × 0.30 = $14.70.

Without fees, you'd show $300. At a 24% rate, ignoring fees would overstate tax by $7.56 on this trade. On thousands of trades, it adds up, and a tool that uses plain price × quantity will overstate your income.

Settlement holds a small advantage

There's no settlement fee, so holding to resolution costs one fee rather than two. That's a trading consideration, not a tax reason, but it's another reason your per-trade fees can't be estimated by a flat percentage.

Card and deposit fees

A deposit fee isn't tied to any contract. It's the cost of moving money.

• Investor under capital treatment: there's no clean way to add it to a contract's basis. Investment expenses aren't deductible. Many people simply treat it as a non-deductible cost, and it's a small number.
• Business trader: may be a Schedule C expense if you qualify.
• Gambler: arguably a cost of the activity; see below.

Rebates

Maker rebates or volume programs reduce your cost. Kalshi's P&L includes rebates, so if you start from that statement, you've already counted them. For the on-chain version, see Polymarket rewards.

Liquidity incentive payments are different from a fee discount, and they may be income. Check how they appear on your 1099-MISC. See Kalshi interest and rewards.

Under gambling treatment

Section 165(d) includes in losses any otherwise allowable deduction incurred in carrying on a wagering transaction. A trading fee that reduces a win is simply part of the result, in practice. A fee on a losing market adds to the loss, which faces the 90% limit. This isn't settled for event contracts, including how fees split between wins and losses.

Third-party platforms

Kalshi notes that users who reach it through a third-party futures commission merchant may be charged fees that vary from its schedule. If you trade through an app, use that app's statement.

Checklist

1. Start with Kalshi's annual P&L, if you can.
2. Don't subtract fees again.
3. Note card fees separately.
4. Tie your own trade-level figures to the statement. See why your numbers don't match.

For on-chain trading, run the free OddsFile check: paste a Polymarket or Hyperliquid address and see your 2026 P&L under each treatment, no signup.

FAQ

Can I deduct Kalshi fees on Schedule A?

No. Fees reduce your result inside the transaction. There's no separate line.

Are Kalshi fees included in my 1099?

Your event-contract results aren't on the 1099s Kalshi lists. Its P&L statement includes fees.

Is the card deposit fee deductible?

For an investor, generally not. For a real trading business, it may be.

Are perps fees handled the same way?

They reduce your result on the position, but check how your forms report them.