Even if your losses for the year exceed your winnings, or if you don't receive a W-2G form, the IRS expects you to report your winnings, which will increase your AGI and, likely, your Marketplace-purchased insurance premiums also. If your gambling winnings exceed certain thresholds based on the type of gambling you did and the amount you won, the casino, poker palace or racetrack is required to send you and the IRS a Form W-2G that shows the winnings, so you can be sure the IRS will be aware of your gambling income. The higher your income, the lower your PTC, and the lower the PTC, the higher your insurance premiums. PTC is the subsidy provided by the government to help pay for your insurance when you purchase it through the government insurance Marketplace. So, whether or not you itemize your deductions and deduct your gambling losses, the full amount of the gambling winnings is included in your AGI, and your AGI is included in your household income, which is used to determine the amount of premium tax credit (PTC) to which you are entitled. The total gambling winnings are included in your adjusted gross income (AGI) for the year, and your losses are taken as an itemized deduction and limited to an amount not exceeding your reported winnings. They are generally not netted on the tax return.

To understand how it happens, you must first understand how gambling winnings and losses are treated on your tax return.

How can this be? Well, you know how tangled a web our tax laws are, and adding Obamacare into the equation has created some interesting fallout, such as this oddity.

If you are a recreational gambler, there is a quirk in the tax law that can actually cause you to pay more for your health insurance if you have gambling winnings, even if the overall result from gambling for the year is actually a loss. Did You Know Gambling Can Increase Your Health Insurance Costs?

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