Winnings And Gains Expense Restoration Act of 2025; WAGER Act of 2025
Summary
The Winnings And Gains Expense Restoration Act of 2025 (WAGER Act of 2025) aims to amend the Internal Revenue Code of 1986 regarding wagering loss limitations. Specifically, it seeks to restore the rules concerning the extent to which wagering losses can be deducted. The bill was introduced in the House of Representatives by Mr. Barr and referred to the Committee on Ways and Means.
Expected Effects
The primary effect of the WAGER Act of 2025 would be to reinstate limitations on the deductibility of wagering losses. This means that taxpayers would only be able to deduct gambling losses up to the amount of their gambling winnings. The amendment would apply to taxable years beginning after December 31, 2025.
Potential Benefits
- Potentially increased tax revenue for the government due to limited deductions.
- May discourage excessive gambling by reducing tax benefits associated with it.
- Could simplify tax calculations for some individuals by clarifying deduction rules.
- May level the playing field between casual and professional gamblers regarding tax treatment.
- Could reduce the incentive for individuals to misreport gambling income and losses.
Most Benefited Areas:
Potential Disadvantages
- May increase the tax burden on individuals who incur significant gambling losses.
- Could create complexity for taxpayers in tracking and documenting gambling winnings and losses.
- May disproportionately affect individuals who rely on gambling income.
- Could lead to decreased participation in legal gambling activities.
- May be perceived as unfair by some taxpayers who view gambling losses as legitimate expenses.
Constitutional Alignment
The WAGER Act of 2025, which pertains to taxation, falls under the broad authority granted to Congress by Article I, Section 8 of the Constitution. This section empowers Congress to lay and collect taxes, duties, imposts, and excises. The act does not appear to infringe upon any specific constitutional rights or protections.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).