Does the CFTC Greenlight Change Your Polymarket Taxes?
The CFTC settlement reopened Polymarket to U.S. traders with stricter contract limits. Here’s what that means for your IRS responsibilities in 2025.
What the CFTC Approved
After a 2022 enforcement action, the Commodity Futures Trading Commission (CFTC) allowed Polymarket to resume U.S. operations in late 2024 with a narrower contract set.1 The platform operates through a regulated entity that lists markets the CFTC considers acceptable “event contracts.”
The key point: the CFTC addressed market integrity and compliance—not tax withholding or reporting obligations. Polymarket still does not issue Form 1099s or provide gain/loss statements.
Tax Treatment Remains Capital Gains
Even with CFTC oversight on certain contracts, Polymarket trades continue to resemble short-term capital assets. U.S. traders should keep reporting each resolved position on Form 8949, summarizing totals on Schedule D, and attaching supporting PDFs when e-filing.
- Short-term gains: taxed at ordinary income rates (10%-37%).
- Long-term gains (held > 12 months): taxed at 0%, 15%, or 20% depending on income level.
- Losses: may offset other capital gains; up to $3,000 can reduce ordinary income annually.
Keep Your Records — The CFTC Doesn’t Report to the IRS
Self-reporting is still mandatory
Regulatory oversight does not mean automated tax forms. Continue exporting wallet transactions and generating your own documentation. PolyTax aggregates trade data, creates Form 8949 PDFs/CSVs, and adds an audit trail tab.
How to Talk About the Approval with Your CPA
- Mention the CFTC settlement if your advisor asks whether Polymarket is “legal.”
- Clarify that no 1099-B is issued—your CPA will expect Form 8949 detail instead.
- Share CFTC press releases or trustworthy coverage (e.g., Reuters) to document the regulatory status.
Action Items for 2025
- Generate updated Form 8949 & Schedule D via PolyTax.
- Bookmark our USA-specific guide for quarterly deadlines and FAQ schema.
- Document contract IDs and market descriptions in case the IRS ever questions the nature of the trades.
Need turbo filing steps?
Our TurboTax import guide walks through attaching PolyTax CSV/PDF exports.