Most tax calculators for prediction markets only show the federal bill, but your state can add anywhere from nothing to over 13 percent on the same profit. This tool adds your state to the picture so you see the real total.
Choose your state and your federal marginal rate to estimate federal tax, state tax, your combined effective rate, and what you actually keep.
Estimate federal plus state tax on your prediction-market profit. Pick your state and your federal marginal rate.
State
FEDERAL TAX
$2,400.00
STATE TAX · MN
$985.00
9.85%
TOTAL TAX
$3,385.00
EFFECTIVE RATE
33.9%
AFTER-TAX TAKE-HOME
$6,615.00
Most states tax the full gain as ordinary income and do not recognize the Section 1256 60/40 split, so the state figure stays the same whether or not you check the box. The federal classification of event contracts is itself unsettled.
Estimate only, not tax advice. Graduated-rate states use the top marginal rate as a conservative approximation, and your actual rate depends on total income, deductions, and filing status. Confirm with a tax professional.
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Nine states have no income tax at all, so prediction-market profit is taxed only federally. At the other end, states like California, New York, New Jersey, and Hawaii reach into the double digits on top of the federal bill.
If you live in a no-income-tax state, your effective rate on trading profit can be many points lower than a neighbor in a high-tax state with identical trades.
States and Section 1256
Even where the federal 60/40 Section 1256 treatment might apply, most states do not recognize it and tax the full gain as ordinary income. That is why the state figure here stays the same whether or not you apply the 60/40 blend.
FAQ
Do I owe state tax on Kalshi profits?
In most states, yes. Trading profit is generally taxable income at the state level. Nine states with no income tax (such as Florida, Texas, and Washington for ordinary gains) are the exception.
Which states have no tax on trading profit?
Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming have no broad individual income tax, so prediction-market profit is taxed only federally.
Is this calculator exact?
No, it is an estimate. Graduated-rate states use the top marginal rate as a conservative approximation, and your real rate depends on total income, deductions, and filing status. Confirm with a tax professional.
Stop calculating one trade at a time
ContractTax does this across your whole Kalshi history: real P&L, a Sharp Score that rates your edge, and your tax numbers under every treatment.
These tools are for education and estimation only, not financial or tax advice. Fee estimates use Kalshi’s standard formula and may differ from your actual fees.
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