Kalshi Taxes and the 1099: What You Get and What to Report (2026)

Kalshi profits are taxable, but the forms Kalshi sends mostly don't show them. According to Kalshi's help center, its 1099s cover interest, rewards and crypto activity, while your event-contract trading results come in a year-end profit and loss statement. How you report that P&L (capital gains, other income, Section 1256 or gambling) is not settled, because the IRS has issued no guidance on event contracts. This guide covers Kalshi taxes end to end: the forms, the treatments, and the numbers.

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.

Which Kalshi 1099 forms exist

Kalshi's tax documentation page lists four forms, each issued only if you cross the IRS reporting threshold for that form:

Forms are delivered electronically; Kalshi says to look for an email from Zenwork with a secure download link. If you got no 1099, Kalshi's explanation is that you likely didn't meet the threshold. That does not mean you have nothing to report.

Two threshold facts worth knowing:

• The 1099-MISC threshold for most payments rose from $600 to $2,000 for payments made in 2026, indexed for inflation afterwards. A $1,500 reward in 2026 may arrive with no form at all and is still income.
• 1099-INT generally kicks in at $10 of interest.

What's missing: your trading profit

Kalshi's help center does not describe any 1099 that reports contract-level buys, sells, cost basis and settlements for event contracts. Instead, Kalshi provides an annual P&L statement (Account, then Tax Info, then choose the year). Kalshi says it:

• uses FIFO (first in, first out) to compute profits and losses,
• includes fees and any rebates,
• is updated on the first morning of each month, so a mid-month download may be stale.

Some third-party guides claim Kalshi issues a full 1099-B for contract trading. Kalshi's own help page doesn't say that. Check what you actually received in your Tax Info page and in the Zenwork email before relying on either claim. If your numbers don't line up, see why your Kalshi 1099 or P&L doesn't match.

How is Kalshi taxed?

Kalshi is a CFTC-regulated Designated Contract Market, and its products are event contracts: each contract pays $1 if the event happens and $0 if it doesn't. Regulation tells you who supervises the exchange. It doesn't decide income tax classification, and the IRS has said nothing specific. Practitioners use four approaches:

The Section 1256 question is the one Kalshi traders ask most, because the 60/40 split lowers the rate on gains. We cover the statute and its weak points in Section 1256 and prediction markets. The gambling route is covered in gambling vs capital gains for event contracts.

Why sports contracts complicate it

Much of Kalshi's volume is sports. In 2026, federal appeals courts split on whether those contracts are federally regulated swaps (Third Circuit, New Jersey case) or are subject to state gambling law (Ninth Circuit, Nevada case). Those cases are about regulation, not income tax, but they show why a preparer might treat a sports contract differently from a CPI or Fed-rate contract.

Worked example: Kalshi taxes on winnings

A single filer's 2026 Kalshi activity:

• Contracts settled or sold at a gain: $8,000
• Contracts settled or sold at a loss: $5,500
• Fees: included in the figures above (Kalshi's P&L includes them)
• Kalshi P&L statement: +$2,500
• Interest on balance: $120 (1099-INT issued)
• Promotional credit: $50 (no 1099-MISC, below threshold; still income)

Assumed rates: 24% ordinary, 15% long-term. 2026 standard deduction (single): $16,100.

In every case, the $120 of interest and $50 credit are ordinary income on top.

Notice what the gambling rows need: gross winnings and gross losses, market by market. Kalshi's P&L statement is a net number, so it can't produce those rows by itself. You need the fills and settlements underneath it. OddsFile's Kalshi import pulls them through a read-only API key and rebuilds per-market totals.

When the year is a loss

Same trader, but $5,500 of gains and $8,000 of losses (P&L −$2,500):

• Capital: $2,500 deductible against other income this year.
• Other income: generally no deduction for the net loss.
• Gambling, itemizing: $5,500 winnings taxed; $4,950 deductible; $550 taxable despite losing money.
• Gambling, standard deduction: $5,500 taxed in full.

More on this in are Kalshi losses tax deductible?

Timing: which year does a Kalshi trade belong to?

Under capital, other-income and gambling treatment, a gain or loss is generally recognized when the position closes: when you sell, or when the market settles and Kalshi pays $1 or $0 per contract. A contract bought in November 2026 on an event resolving in February 2027 is a 2027 item, even though the money left your account in 2026. Kalshi's FIFO P&L follows the same logic.

Section 1256 is the exception. If it applied, open positions would be treated as sold at fair market value on December 31 and the unrealized gain or loss taxed that year, then adjusted when the position actually closes. That's one more reason a 1256 position needs year-end prices for every open contract, which a net P&L statement doesn't provide.

Reconciling Kalshi's numbers

Kalshi uses FIFO, includes fees, and reports by calendar year. Your own spreadsheet might differ because of:

1. Open positions at year end. Not realized, so not in the P&L (unless you use Section 1256, which marks open positions to market on December 31).
2. Settlement timing. A contract settles when the market resolves, which can be days after the event.
3. Fees counted twice or not at all in your own tracking.
4. Time zones. A late-night December 31 trade (Eastern) may fall on January 1 in UTC.
5. Stale statement. Downloaded mid-month, before the monthly update.

A Kalshi P&L reconciliation report that ties our per-market numbers to Kalshi's statement is planned for the January filing season.

Robinhood and other front ends

If you trade event contracts through Robinhood, those trades are routed to Kalshi or other exchanges, but your tax documents come from Robinhood, not Kalshi. Reports indicate Robinhood issued an annual event-contract statement rather than a 1099 for these trades. See Robinhood prediction market taxes.

Records to keep

• Kalshi's annual P&L statement for each year
• A fills and settlements export (or API pull) to support per-market detail
• Every 1099 Kalshi issued, even small ones
• Deposits and withdrawals to reconcile against your bank
• A note of the treatment you and your preparer chose, and why

Run the free OddsFile check to see how prediction-market P&L looks under each treatment. Connecting Kalshi uses a read-only API key in the full app.

Filing in TurboTax

TurboTax has no "Kalshi" import. How you enter Kalshi depends on the treatment: Form 8949 lines for capital treatment, Form 6781 for Section 1256, "other income" or "gambling winnings" screens for the others. Walkthrough in prediction market taxes in TurboTax.

State taxes

California, New York and most other states start from federal AGI. Gambling-loss rules and the 90% limit don't automatically carry over to every state. See prediction market state taxes.

FAQ

Does Kalshi send a 1099?

Kalshi says it issues 1099-INT, 1099-MISC, 1099-B (crypto transfers) and 1099-DA (via ZeroHash) when you meet IRS thresholds. Trading results appear in your annual P&L statement on the Tax Info page.

What is the Kalshi 1099 threshold?

Kalshi defers to IRS thresholds. For 2026 payments, 1099-MISC generally starts at $2,000 (up from $600). 1099-INT generally starts at $10. Below the threshold you get no form but still owe tax on the income.

Do you pay taxes on Kalshi winnings?

Yes. Profits are taxable income. Whether they are capital gains, other income, Section 1256 gains or gambling winnings has not been decided by the IRS.

Are Kalshi contracts Section 1256 contracts?

Unclear and contested. Kalshi is a regulated exchange, but §1256 also requires a qualifying contract type, and fully collateralized event contracts may not be "regulated futures contracts." Many practitioners consider claiming it aggressive.

Does Kalshi use FIFO?

Yes, according to Kalshi's help center. If you or your preparer use a different method, your numbers will differ from the statement.

Can I file with only Kalshi's P&L statement?

For capital or other-income treatment, the net figure may be the starting point, though per-trade detail supports Form 8949. Gambling treatment needs gross winnings and losses, which the net figure doesn't show.

Bottom line

Kalshi gives you a net number and a few small forms; the reporting decision is yours and your preparer's. Get the per-market detail first, compare the treatments, then decide. Start with the free check, and read are prediction market winnings taxable? for the broader framework.