Robinhood Prediction Market Taxes: No 1099, Now What?

Robinhood prediction market profits are taxable, but Robinhood has said it does not issue a 1099 for event contract trades and does not report them to the IRS. You get an annual statement instead, which Robinhood says is not a substitute tax form. That leaves you to calculate the gain or loss and pick a reporting approach, with no IRS guidance on how event contracts should be taxed.

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 sources; a tax professional can tell you which position fits your situation.

What Robinhood provides for event contracts

Robinhood's prediction markets hub launched in March 2025 through Robinhood Derivatives, LLC, with contracts listed on KalshiEX, a CFTC-regulated exchange (Robinhood newsroom). Robinhood has announced plans for its own exchange, so the listing venue may change; check your statement.

On taxes, Robinhood's support page on event contracts has said, as quoted by a CPA firm that retrieved it in September 2026 (Monaco CPA):

• Robinhood doesn't provide a 1099 for event contract trades.
• Event contract trades aren't reported to the IRS by Robinhood.
• The annual statement is not a substitute tax reporting form.
• Taxes on event contracts are the customer's sole responsibility.

We could not load that support page directly, so confirm the current wording in the Robinhood app (Account, then Tax Center or Help) before you file. Robinhood's regular stock and options 1099 is separate and still arrives as usual.

The reporting options

Because the IRS hasn't ruled, practitioners use four approaches. Each is covered in depth elsewhere; here is how they apply to a Robinhood account.

The Section 1256 argument is somewhat stronger for contracts on a CFTC-regulated exchange than for offshore crypto venues, but the statute requires more than CFTC regulation, and swaps are excluded (IRC §1256). See Section 1256 and prediction markets for the full argument and gambling vs capital gains for the trade-offs.

Worked example: a mixed year

In 2026 you trade sports and economics contracts on Robinhood:

• 140 contracts settle in your favor: total gains $6,200
• 210 contracts settle against you or are sold at a loss: total losses $7,900
• Net: −$1,700

You take the standard deduction and your ordinary rate is 22% (assumed).

Capital asset: net short-term capital loss of $1,700, deductible against other income. Tax saved: about $1,700 × 22% = $374. If you also had $5,000 of stock gains, the loss offsets those first.

Section 1256: the $1,700 loss is 60% long-term, 40% short-term, then follows capital loss rules; deducted against other income it's worth the same $374 here, with the option to carry back against prior 1256 gains.

Gambling: winnings of $6,200 go on Schedule 1. Losses are only deductible if you itemize, and you don't, so taxable income rises by $6,200: about $1,364 of tax on a year you lost money. If you itemized, 90% × $7,900 = $7,110 would count, capped at $6,200 of winnings, which zeroes out the winnings; but itemizing only helps if all your itemized deductions together beat the $16,100 standard deduction. See the 2026 90% limit.

Other income: net is negative, so you report zero and get no deduction. Tax: $0, no benefit from the loss.

Same trades, roughly $1,700 of difference between the best and worst outcome. That spread is why the choice needs a professional's sign-off and a documented rationale, applied consistently.

Are Robinhood prediction market losses tax deductible?

It depends entirely on the treatment. Under capital or Section 1256 treatment, yes, within the capital loss limits. Under gambling treatment, only if you itemize, only up to winnings, and only 90% from 2026. Under other income, a net loss does nothing. More detail: Kalshi losses and taxes, which applies here because the contracts are Kalshi-listed.

Building your own numbers

1. Download the annual event contracts statement and full account history.
2. List every contract: open date, close or settlement date, quantity, price, fees, payout.
3. Compute gain or loss per contract with fees included.
4. Keep a short memo of the treatment your return uses and why.

If you also trade on Kalshi directly or on Polymarket, combine everything; the treatment should be consistent across venues for similar contracts. See Kalshi taxes and the 1099 and are prediction market winnings taxable?.

Run the free OddsFile check to see how the four treatments compare on your own numbers. CSV import covers venues without a direct connector, Robinhood included.

FAQ

Does Robinhood send a 1099 for prediction markets?

Robinhood has said it does not issue a 1099 for event contract trades and does not report them to the IRS. Confirm the current statement in the app each tax season.

Do I still have to report Robinhood event contract gains?

Yes. Income is taxable whether or not a form is issued. The open question is how it's classified, not whether it's reported.

Can I use Robinhood's annual statement on my return?

You can use it as your record, but Robinhood says it isn't a tax form. You or your software still convert it into Form 8949 lines, a Schedule 1 entry, or Form 6781, depending on treatment.

Is Robinhood event contract income taxed as gambling?

Some preparers report it that way; others use capital treatment. Since 2026 the gambling route caps deductible losses at 90%, which makes it costly in losing or break-even years.

What about state taxes?

States set their own rules and may not follow the federal 90% change. See prediction market state taxes.