Are Kalshi Interest and Rewards Taxable? 1099-INT, 1099-MISC and What to Report

Yes. Kalshi interest is ordinary income, and Kalshi rewards and promotional credits are generally ordinary income as well, even when no form arrives. You should get a 1099-INT once interest reaches $10, and a 1099-MISC for rewards once they cross the reporting threshold, which is $2,000 for payments made in 2026. These items are separate from your event-contract P&L, and they keep their ordinary character however you report your trades.

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 pays and reports

Kalshi's tax documentation page says a 1099-INT "contains interest payments from Kalshi" and a 1099-MISC "contains credit/rewards from Kalshi." If you received none, Kalshi says you likely did not meet the IRS thresholds.

Its APY page said the following when we checked in October 2026:

• 3.50% APY on prediction market and perps balances, variable and changeable at any time;
• interest accrues daily and is paid monthly;
• an average monthly balance of at least $250 is required;
• the program is limited to users in the US and its territories, and a Social Security number is needed to receive payments above $10 a year;
• a separate 7% program for qualifying perps positions, with a capacity limit and a payout cap.

Rates and terms change, so use your own statements, not this list, for your return.

Interest

The IRS rule is simple. Topic 403 says interest is taxable in the year it becomes available to you, that you should receive a form at $10 or more, and that you must report all taxable interest even if you don't get a form.

Example: an average balance of $8,000 at 3.5% produces about $280 for the year. At a 22% bracket, that's about $62 of federal tax, plus state tax in most states.

Rewards, referrals and promotional credits

The word Kalshi uses is "credit/rewards." Taxes work the same way for each:

• Referral bonuses you claim
• Sign-up or deposit promotions
• Trading rewards and leaderboards

All income is taxable unless excluded, and these aren't excluded. They generally go on Schedule 1: line 8i for prizes and awards or line 8z for other income, depending on the nature of the payment and how the 1099-MISC labels it. Ask your preparer or follow the form's box. Box 3 of the 1099-MISC is used for other income, including prizes and awards.

The 2026 threshold change

For payments made in 2026, the 1099-MISC threshold rose from $600 to $2,000, with inflation indexing after that. Your 2025 credits fall under the old $600 threshold. A higher threshold means fewer forms, not less income. A $1,500 referral total in 2026 may arrive with no form and is still reportable.

When is a referral bonus income?

Kalshi's referral FAQ says rewards become claimable and that you click to claim. Under the constructive receipt rule, income can be taxable once it's available to you without substantial limits, even if you haven't taken it. So a bonus you could have claimed in December but only claimed in January might be a December item. For small amounts this is unlikely to matter, but it's worth knowing if you have a large unclaimed balance at year end.

Don't double count

Three separate numbers appear in your Kalshi history. Keep them apart.

The P&L statement is described as summarizing trading activity, including profits, losses, fees and rebates. The page doesn't say whether interest or credits are included in that number. Compare it with your account history before you add them on top, so you don't count them twice. See why your Kalshi 1099 or P&L doesn't match.

If a credit was spent on a contract, the credit is income when received and it becomes your cost in that contract. If the contract then loses, that's a trading loss, handled under your treatment.

Worked example

A single filer in the 24% bracket has this 2026 Kalshi activity:

The $790 of interest and credits is taxable at 24%, or about $190, even though the contracts lost money. Under capital treatment, the $2,000 loss can reduce other income, so the net effect is a small saving. Under other-income treatment, the loss generally doesn't offset anything. See are Kalshi losses tax deductible?

Checklist

1. Download every form from Account, then Tax Info.
2. Check your email, including spam, for a message from Zenwork, Kalshi's form provider.
3. Total your interest and credits from your account history, even if no form arrived.
4. Confirm your Social Security number is on file, so interest payments above $10 aren't held up and your form is right.
5. Report these on your return separately from your trading result.

For the event-contract side, read Kalshi taxes and the 1099. If you also trade on-chain, run the free OddsFile check: paste a Polymarket or Hyperliquid address and see your 2026 P&L under each treatment, no signup.

FAQ

Is Kalshi interest taxed if I never withdrew it?

Yes. Interest is taxed when it becomes available to you, not when you withdraw it.

I earned $7 of interest. Do I report it?

Yes. No form is due under $10, but the income is still reportable.

Are Kalshi rewards capital gains?

Generally no. They're ordinary income when received.

Does gambling treatment change this?

No. Interest stays interest. Rewards aren't wagers you placed, so they don't naturally belong in gambling winnings, though no authority addresses Kalshi rewards specifically.