Kalshi and Polymarket in TurboTax: Where Prediction-Market Results Go

TurboTax has no "Kalshi" or "Polymarket" button. Where your results go depends on the tax treatment you and your preparer settle on: capital-asset sales go to Form 8949 / Schedule D, Section 1256 contracts go to Form 6781, "other income" goes to Schedule 1, and gambling goes to gambling winnings plus Schedule A losses. The hard part is producing the right numbers before you open TurboTax.

OddsFile is software, not tax advice. The IRS has not issued guidance on how prediction-market contracts are taxed. This article explains where each possible treatment is reported; a tax professional can tell you which position fits your situation.

Step 1: decide the treatment before you type anything

Each treatment uses different forms and different numbers. Pick one and apply it consistently across the year; the options and trade-offs are in are prediction market winnings taxable?.

Step 2: get the numbers right

Venue statements are not ready-to-file inputs.

• Kalshi gives an annual P&L statement (Account > Tax Info) using FIFO and including fees and rebates, updated on the first of each month (Kalshi help). Its 1099s cover interest (1099-INT), rewards (1099-MISC) and crypto transfers (1099-B, 1099-DA via ZeroHash), not per-contract event results. A net P&L figure works for "other income" but not for Form 8949, which needs per-disposal rows, or for gambling, which needs gross winnings and gross losses. See Kalshi 1099 doesn't match.
• Polymarket (international) issues no tax forms. You need your full activity history, including losing positions that were never redeemed (unredeemed losing positions) and fees (Polymarket fees).
• Robinhood event contracts run through Kalshi; check Robinhood's current statements. See Robinhood prediction-market taxes.
• USDC on-ramps may send a Form 1099-DA showing gross proceeds. That's separate from your trading P&L (1099-DA explained).

Where each treatment goes in TurboTax (general guidance)

TurboTax's screens and import options change by year and edition, so treat the following as orientation and confirm against TurboTax's own help pages.

Capital-asset treatment (Form 8949)

This is the investment-sales section, where you'd enter stock or crypto sales. You can enter each sale, import a gain/loss file from a supported source, or, where the IRS rules allow, enter totals per Form 8949 box and supply the transaction detail as an attached statement (see "Exception 2" in the Form 8949 instructions). Online editions may require a PDF attachment or a mailed Form 8453 for summary entries.

User reports for the 2025 season say TurboTax changed which CSV formats it accepts, so check the current import options before building your file. For digital assets, boxes G through L apply from 2025; Kalshi contracts are not digital assets. Sample rows are in prediction-market Form 8949.

Section 1256 (Form 6781)

Section 1256 contracts are usually entered in the investment section as a 1099-B item flagged as Section 1256, or directly as Form 6781 in desktop forms mode. You'd enter one net gain or loss for the year; the software applies the 60/40 split. Confirm your edition supports Form 6781 first. Claiming 1256 for event contracts is widely considered aggressive, so read Section 1256 and prediction markets and talk to a professional before choosing it.

Other income (Schedule 1, line 8z)

This is the miscellaneous or "other reportable income" area of the income section. You'd enter a description (for example "Net income from event contracts, Kalshi") and the net amount. If your net is negative, it's generally not deductible under this treatment.

Gambling (W-2G section and Schedule A)

This is the gambling winnings area. Enter gross winnings even without a W-2G (prediction venues generally don't issue them). Losses are entered in the same flow but only reduce tax if you itemize. From 2026, 90% of losses count, capped at winnings (the 90% limit).

Worked example: one year, four entries

A trader's 2026 Kalshi and Polymarket year:

• 412 closed positions, all held under a year
• Winning markets: +$31,200; losing markets: −$27,900; fees included
• Net: +$3,300

Same economics, four very different returns. The gambling entry adds $31,200 to adjusted gross income.

Common TurboTax mistakes with prediction markets

• Entering the 1099-DA proceeds as profit. Gross USDC sale proceeds are not your trading gain.
• Double counting. Reporting a Kalshi net figure as other income and the same trades on Form 8949.
• Leaving out losing Polymarket positions because they were never redeemed and don't show as sales.
• Mixing treatments by outcome, for example winners as capital gains and losers as gambling. Pick one approach and document it.
• Ignoring fees. Polymarket taker fees and Kalshi fees change basis or proceeds.

Where OddsFile fits

OddsFile imports Kalshi, Polymarket and Hyperliquid activity, computes per-market P&L with fees, and shows all four treatments side by side. It exports a Form 8949 CSV and an audit trail now; a TurboTax-ready file is planned for launch (December 15, 2026). It doesn't file your return or choose a treatment for you.

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 import Kalshi directly into TurboTax?

Not as a native connection as of October 2026. You'd enter results manually or import a file in a format TurboTax accepts for your treatment.

Can I import Polymarket into TurboTax?

Not directly. Polymarket issues no tax forms, so you need a transaction history converted into per-disposal rows (capital treatment) or summary figures (other treatments).

Which TurboTax edition do I need?

Investment sales and Form 6781 usually require an edition that supports investment income. Check TurboTax's current edition comparison for Form 8949 imports and Section 1256 support.

Should I enter my Kalshi P&L as "other income"?

That's one approach some preparers use. It's simple, but net losses are generally not deductible under it. Compare it with the alternatives before deciding.

Do I need to attach anything?

If you enter Form 8949 totals instead of each row, the IRS requires the detail on an attached statement. TurboTax may handle this with a PDF upload or Form 8453.