Polymarket taxes: what Polymarket and Polymarket US report, and what the IRS says

Polymarket US asks for your “legal name, residential address, and Social Security number for verification” at sign-up (Polymarket US, signup). Its Participant Agreement says: “You consent to the electronic delivery of all tax forms, including, without limitation, IRS Form 1099-B” (Participant Agreement). Form 1099-B is the form brokers use to report sales of securities and commodities to you and the IRS.

The agreement confirms how forms are delivered, not which form every user receives or what it shows; Polymarket US’s documentation does not spell that out. It also says Polymarket US “provides no legal, tax, investment, financial, or other advice”. Promotional credits cannot be withdrawn as cash, but profits made with them can; the documentation does not say how they are reported.

Polymarket’s international site is closed to US residents: “Polymarket.com is not accessible for US residents” (Polymarket help centre). Its terms of use put tax on the user: “It is your sole responsibility to determine whether there are any tax consequences from any transactions you initiate” (Polymarket terms). We found no mention of any tax form in its documentation, help centre or terms. If you trade there from a country where it is allowed, your own country’s rules apply.

The general rule: “In most cases, an amount included in your income is taxable unless it is specifically exempted by law,” and taxable income “must be reported on your return” (IRS Publication 525). For crypto, “digital assets are considered property, not currency”, stablecoins count as digital assets, and Form 1040 asks whether you received or disposed of any (IRS, digital assets).

What no IRS page we found addresses: whether prediction-market gains are capital gains, gambling winnings, or something else, and whether trading in a dollar token on a crypto platform counts as disposing of a digital asset. The answer changes how gains and losses are reported and whether losses can offset other income. The US rules in more detail, including what Kalshi sends: event contract taxes in the US.

• Every trade: date, market, side, number of shares or contracts, price and fee.
• Every settlement or payout, and every deposit and withdrawal.
• On Polymarket.com, transaction hashes and the dollar value of each crypto transfer, since the platform sends no statement.
• Any tax form Polymarket US delivers, and the account statements behind it.