MaxGhenis · Oct 9, 2026 · Oct 9, 2026 · Oct 9, 2026 · Oct 9, 2026 · Oct 9, 2026
diff --git a/changelog.d/fix-gambling-winnings-gross-income.fixed.md b/changelog.d/fix-gambling-winnings-gross-income.fixed.md
@@ -0,0 +1 @@
+Count gambling winnings in federal gross income, limit the wagering losses deduction to 90% of losses from 2026 and to the head's and spouse's gambling, treat it as a Schedule A itemized deduction, and align the states that tax gambling winnings or build on federal itemized deductions.
diff --git a/changelog.d/nc-claim-of-right-deduction.added.md b/changelog.d/nc-claim-of-right-deduction.added.md
@@ -0,0 +1 @@
+Add North Carolina's itemized deduction for repaying income received under a claim of right (G.S. 105-153.5(a)(2)d), with a new claim_of_right_repayment input.
diff --git a/changelog.d/nc-wagering-losses-deduction.added.md b/changelog.d/nc-wagering-losses-deduction.added.md
@@ -0,0 +1 @@
+Add North Carolina's itemized deduction for wagering losses allowed under 26 U.S.C. 165(d), from 2025 (G.S. 105-153.5(a)(2)e, S.L. 2026-41 section 44.2).
diff --git a/policyengine_us/parameters/gov/irs/deductions/deductions_if_itemizing.yaml b/policyengine_us/parameters/gov/irs/deductions/deductions_if_itemizing.yaml
@@ -2,12 +2,10 @@ description: Deductions from taxable income if itemizing.
 values:
   2018-01-01:
     - qualified_business_income_deduction
-    - wagering_losses_deduction
     - itemized_taxable_income_deductions
 
   2025-01-01:
     - qualified_business_income_deduction
-    - wagering_losses_deduction
     - itemized_taxable_income_deductions
     - tip_income_deduction
     - overtime_income_deduction
@@ -16,7 +14,6 @@ values:
 
   2029-01-01:
     - qualified_business_income_deduction
-    - wagering_losses_deduction
     - itemized_taxable_income_deductions
 
 metadata:

diff --git a/policyengine_us/parameters/gov/irs/deductions/itemized/limitation/excluded_deductions.yaml b/policyengine_us/parameters/gov/irs/deductions/itemized/limitation/excluded_deductions.yaml
@@ -5,15 +5,14 @@ values:
   # and wagering losses (section 165(c)(2), (c)(3) and (d)).
   # investment_interest_expense is the investment interest that
   # interest_deduction includes through non_mortgage_interest.
-  # wagering_losses_deduction is deducted outside
-  # total_itemized_taxable_income_deductions, so it never enters the base.
   # The 2017 worksheet also removes qualified disaster-relief contributions
   # (P.L. 115-63 sec. 504(a)(3), P.L. 115-123 sec. 20104(a)(3)), which are
   # not modeled.
   2009-01-01:
     - medical_expense_deduction
     - investment_interest_expense
     - casualty_loss_deduction
+    - wagering_losses_deduction
 metadata:
   unit: list
   period: year

diff --git a/policyengine_us/parameters/gov/irs/deductions/itemized/wagering_losses/rate.yaml b/policyengine_us/parameters/gov/irs/deductions/itemized/wagering_losses/rate.yaml
@@ -0,0 +1,17 @@
+description: The US allows this share of wagering losses as an itemized deduction, up to wagering gains.
+values:
+  0000-01-01: 1
+  # P.L. 119-21 sec. 70114 rewrote section 165(d)(1) for taxable years
+  # beginning after December 31, 2025.
+  2026-01-01: 0.9
+metadata:
+  unit: /1
+  period: year
+  label: Wagering losses deduction rate
+  reference:
+    - title: 26 U.S. Code § 165(d) - Wagering losses
+      href: https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section165&num=0&edition=prelim
+    - title: P.L. 119-21, sec. 70114 - Extension and modification of limitation on wagering losses
+      href: https://www.govinfo.gov/content/pkg/PLAW-119publ21/pdf/PLAW-119publ21.pdf#page=96
+    - title: 2024 Instructions for Schedule A (Form 1040), line 16 - Gambling losses
+      href: https://www.irs.gov/pub/irs-prior/i1040sca--2024.pdf#page=11
diff --git a/policyengine_us/parameters/gov/irs/deductions/itemized_deductions.yaml b/policyengine_us/parameters/gov/irs/deductions/itemized_deductions.yaml
@@ -7,6 +7,8 @@ values:
     - medical_expense_deduction
     - casualty_loss_deduction
     - misc_deduction
+    # Gambling losses, Schedule A line 16 (other itemized deductions).
+    - wagering_losses_deduction
   2020-01-01:
     - charitable_deduction  
     - charitable_deduction_for_non_itemizers
@@ -15,13 +17,22 @@ values:
     - medical_expense_deduction
     - casualty_loss_deduction
     - misc_deduction
+    # Gambling losses, Schedule A line 16 (other itemized deductions).
+    - wagering_losses_deduction
   2022-01-01:
     - charitable_deduction
     - interest_deduction
     - salt_deduction
     - medical_expense_deduction
     - casualty_loss_deduction
     - misc_deduction
+    # Gambling losses, Schedule A line 16 (other itemized deductions).
+    - wagering_losses_deduction
 metadata:
   unit: list
   label: itemized deductions
+  reference:
+    - title: 2024 Schedule A (Form 1040), lines 4-17
+      href: https://www.irs.gov/pub/irs-prior/f1040sa--2024.pdf#page=1
+    - title: 2024 Instructions for Schedule A (Form 1040), line 16 - Other itemized deductions
+      href: https://www.irs.gov/pub/irs-prior/i1040sca--2024.pdf#page=11
diff --git a/policyengine_us/parameters/gov/irs/gross_income/sources.yaml b/policyengine_us/parameters/gov/irs/gross_income/sources.yaml
@@ -33,6 +33,9 @@ values:
     - taxable_retirement_distributions
     - taxable_roth_conversions
     - miscellaneous_income
+    # Gambling winnings, including lotteries and raffles (Schedule 1 line
+    # 8b). Only itemizers deduct the losses (wagering_losses_deduction).
+    - gambling_winnings
     # Listed separately on 1040 line 8g.
     - ak_permanent_fund_dividend
     # Alimony from divorces executed before the TCJA cutoff (Schedule 1 line 2a).
@@ -51,7 +54,11 @@ metadata:
       href: https://www.law.cornell.edu/uscode/text/26/111
     - title: 26 U.S. Code § 61(a)(14) - Income from an interest in an estate or trust
       href: https://www.law.cornell.edu/uscode/text/26/61#a_14
-    - title: 2024 Schedule 1 (Form 1040), line 5 - Rental real estate, royalties, partnerships, S corporations, trusts, etc.
+    - title: 2024 Schedule 1 (Form 1040), line 5 - Rental real estate, royalties, partnerships, S corporations, trusts, etc., and line 8b - Gambling
       href: https://www.irs.gov/pub/irs-prior/f1040s1--2024.pdf#page=1
     - title: 2024 Instructions for Schedule E (Form 1040), Part III - Income or Loss From Estates and Trusts
       href: https://www.irs.gov/pub/irs-prior/i1040se--2024.pdf#page=11
+    - title: 2024 Instructions for Form 1040, Schedule 1 line 8b - Gambling
+      href: https://www.irs.gov/pub/irs-prior/i1040gi--2024.pdf#page=85
+    - title: 2025 Instructions for Form 1040, Schedule 1 line 8b - Gambling
+      href: https://www.irs.gov/pub/irs-prior/i1040gi--2025.pdf#page=91
diff --git a/policyengine_us/parameters/gov/states/al/tax/income/agi/gross_income_sources.yaml b/policyengine_us/parameters/gov/states/al/tax/income/agi/gross_income_sources.yaml
@@ -19,6 +19,9 @@ values:
     - partnership_s_corp_income
     - farm_operations_income
     - farm_rent_income
+    # Prizes and awards: contests, lotteries and gambling winnings (Form 40
+    # page 2, Part I, other income), of the head and spouse.
+    - al_gambling_winnings
 
 metadata:
   unit: list

diff --git a/policyengine_us/parameters/gov/states/al/tax/income/deductions/itemized/sources.yaml b/policyengine_us/parameters/gov/states/al/tax/income/deductions/itemized/sources.yaml
@@ -12,6 +12,9 @@ values:
     - al_casualty_loss_deduction # Section (a), (6)
     - al_misc_deduction # Section (a), (23)
     - al_interest_deduction # Section (a), (2)
+    # Schedule A line 25: gambling losses to the extent of gambling winnings,
+    # not subject to the 2% limit.
+    - al_gambling_loss_deduction
 
 metadata:
   unit: list
@@ -28,3 +31,5 @@ metadata:
       href: https://www.revenue.alabama.gov/ultraviewer/viewer/basic_viewer/index.html?form=2024/01/23f40schabdc_blk.pdf#page=1
     - title: 2024 Alabama Income Tax Instructions
       href: https://www.revenue.alabama.gov/wp-content/uploads/2025/01/24f40bk.pdf#page=18
+    - title: 2025 Alabama Income Tax Instructions, Schedule A line 25 - gambling losses
+      href: https://www.revenue.alabama.gov/wp-content/uploads/2026/01/25f40bk.pdf#page=21
diff --git a/...us/parameters/gov/states/ca/tax/income/deductions/itemized/limit/excluded_deductions.yaml b/...us/parameters/gov/states/ca/tax/income/deductions/itemized/limit/excluded_deductions.yaml
@@ -4,12 +4,17 @@ values:
     - medical_expense_deduction
     - casualty_loss_deduction
     - non_mortgage_interest
+    # Itemized Deductions Worksheet line 2: "plus any gambling losses
+    # included on line 16".
+    - ca_wagering_losses_deduction
 
 metadata:
   unit: list
   period: year
   label: itemized deductions excluded from CA high-AGI limitation
   reference:
+  - title: 2025 Form 540 booklet, Schedule CA (540) Itemized Deductions Worksheet, line 2
+    href: https://www.ftb.ca.gov/forms/2025/2025-540-booklet.pdf#page=68
   - title: 2021 Form 540 Schedule CA instructions
     href: https://www.ftb.ca.gov/forms/2021/2021-540-ca-instructions.html
   - title: 2022 Form 540 Schedule CA instructions

diff --git a/policyengine_us/parameters/gov/states/de/tax/income/deductions/itemized/sources.yaml b/policyengine_us/parameters/gov/states/de/tax/income/deductions/itemized/sources.yaml
@@ -5,6 +5,8 @@ values:
     - charitable_deduction
     - interest_deduction
     - casualty_loss_deduction
+    # PIT-RSA line 16, other itemized deductions permitted under federal law.
+    - wagering_losses_deduction
 metadata:
   unit: list
   period: year
@@ -14,6 +16,6 @@ metadata:
       href: https://revenuefiles.delaware.gov/2022/TY22_PIT-RSA_2022-02_PaperInteractive.pdf
     - title: Code of Delaware. Title30. CHAPTER 11. Personal Income Tax, § 1109
       href: https://delcode.delaware.gov/title30/c011/sc02/index.html
-    - title: 2025 Delaware Individual Income Tax Return Instructions
+    - title: "2025 Delaware Individual Income Tax Return Instructions #page 7,12"
       href: https://revenuefiles.delaware.gov/2025/PITForms_Instructions/Instructions/PIT-RES_Instructions_2025-01.pdf#page=7
 
diff --git a/policyengine_us/parameters/gov/states/hi/tax/income/deductions/itemized/sources.yaml b/policyengine_us/parameters/gov/states/hi/tax/income/deductions/itemized/sources.yaml
@@ -6,6 +6,8 @@ values:
     - hi_interest_deduction
     - hi_casualty_loss_deduction
     - hi_salt_deduction
+    # Worksheet A-6, line 30: gambling losses, up to gambling winnings.
+    - wagering_losses_deduction
 metadata:
   unit: list
   period: year
@@ -23,5 +25,5 @@ metadata:
       href: https://files.hawaii.gov/tax/forms/2018/n11ins.pdf#page=19
     - title: Hawaii Income Tax Law, Chapter 235, Section 235-2.4
       href: https://files.hawaii.gov/tax/legal/hrs/hrs_235.pdf#page=10
-    - title: 2025 Hawaii N-11 Instructions Itemized Deductions
-      href: https://files.hawaii.gov/tax/forms/current/n11ins.pdf#page=17
+    - title: "2025 Hawaii N-11 Instructions Itemized Deductions #page 17,19"
+      href: https://files.hawaii.gov/tax/forms/2025/n11ins.pdf#page=17
diff --git a/policyengine_us/parameters/gov/states/ia/tax/income/gross_income/sources.yaml b/policyengine_us/parameters/gov/states/ia/tax/income/gross_income/sources.yaml
@@ -16,6 +16,8 @@ values:
     - farm_operations_income
     - taxable_unemployment_compensation
     - miscellaneous_income
+    # IA 1040 line 13, gambling winnings, of the head and spouse.
+    - ia_gambling_winnings
 
 metadata:
   unit: list

diff --git a/...e_us/parameters/gov/states/ky/tax/income/deductions/itemized/wagering_losses_allowed.yaml b/...e_us/parameters/gov/states/ky/tax/income/deductions/itemized/wagering_losses_allowed.yaml
@@ -0,0 +1,18 @@
+description: Kentucky allows the federal wagering losses deduction as an itemized deduction if this is true.
+values:
+  2000-01-01: true
+  # For 2018 Kentucky disallowed every section 165 loss.
+  2018-01-01: false
+  # 2019 Ky. Acts ch. 151, sec. 37 restored wagering losses allowed under
+  # section 165(d), for taxable years beginning on or after January 1, 2019
+  # (sec. 83).
+  2019-01-01: true
+metadata:
+  unit: bool
+  period: year
+  label: Kentucky wagering losses itemized deduction allowed
+  reference:
+    - title: "2019 Ky. Acts ch. 151, sec. 37 (KRS 141.019(2)(b)) and sec. 83 #page 60,112"
+      href: https://apps.legislature.ky.gov/law/acts/19RS/documents/0151.pdf#page=60
+    - title: TY2018 Kentucky Publication 1345, itemized deductions obsolete for tax year 2018
+      href: https://revenue.ky.gov/Software-Developer/Software%20Development%20Documents/TY2018%20KY%20Publication%201345-Handbook%20for%20Electronic%20Filing.pdf#page=9
diff --git a/policyengine_us/parameters/gov/states/mi/tax/income/subtractions.yaml b/policyengine_us/parameters/gov/states/mi/tax/income/subtractions.yaml
@@ -11,6 +11,20 @@ values:
     - mi_interest_dividends_capital_gains_deduction # Line 27
     - mi_529_deduction
     - salt_refund_income # Line 16
+  # 2021 PA 168 added a deduction for the wagering losses a casual gambler
+  # deducts on the federal return, for tax years beginning in 2021.
+  2021-01-01:
+    - us_govt_interest # Line 10
+    - military_retirement_pay # Line 11
+    - taxable_social_security # Line 14
+    - military_service_income # Line 14
+    - section_22_income # Line 22
+    - mi_standard_deduction  # Line 24 & 25
+    - mi_pension_benefit  # Line 26
+    - mi_interest_dividends_capital_gains_deduction # Line 27
+    - mi_529_deduction
+    - salt_refund_income # Line 16
+    - mi_wagering_losses_deduction # Line 23 (2025), miscellaneous subtractions
   2026-01-01:
     - us_govt_interest # Line 10
     - military_retirement_pay # Line 11
@@ -24,6 +38,7 @@ values:
     - mi_qualified_tips_deduction  # Qualified tips (PA 24 of 2025), TY2026-2028
     - mi_qualified_overtime_deduction  # Qualified overtime compensation (PA 24 of 2025), TY2026-2028
     - salt_refund_income # Line 16
+    - mi_wagering_losses_deduction # Line 23 (2025), miscellaneous subtractions
 metadata:
   unit: list  
   label: Michigan taxable income subtraction sources  
@@ -35,6 +50,10 @@ metadata:
       href: https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/IIT/TY2023/BOOK_MI-1040.pdf#page=47
     - title: Michigan Legal Code Section 206.30 
       href: https://www.legislature.mi.gov/Laws/MCL?objectName=mcl-206-30
+    - title: Michigan Treasury notice - New Tax Treatment of Wagering Losses for Casual Gamblers (2021 PA 168)
+      href: https://www.michigan.gov/taxes/rep-legal/notices/notice-new-tax-treatment-of-wagering-losses-for-casual-gamblers-under-the-michigan-income-tax-act
+    - title: 2025 MI-1040 booklet, Schedule 1 line 23 - Miscellaneous subtractions (wagering losses)
+      href: https://www.michigan.gov/taxes/-/media/Project/Websites/taxes/Forms/IIT/TY2025/MI-1040-Book.pdf#page=16
     - title: Michigan Standard Deduction
       href: https://web.archive.org/web/20250202140014/https://www.michigan.gov/taxes/iit/retirement-and-pension-benefits/michigan-standard-deduction
     - title: Michigan 2022 MI-1040 Individual Income Tax FORMS AND INSTRUCTIONS

diff --git a/policyengine_us/parameters/gov/states/mt/tax/income/deductions/itemized/misc_deductions.yaml b/policyengine_us/parameters/gov/states/mt/tax/income/deductions/itemized/misc_deductions.yaml
@@ -6,13 +6,22 @@ description: Montana counts these sources as miscellaneous deductions.
 values:
   2021-01-01:
     - casualty_loss_deduction
-  2024-01-01: []
+    # Gambling losses, up to gambling winnings (2023 Form 2 instructions).
+    - mt_wagering_losses_deduction
+  # From 2024 Montana starts from federal taxable income, which carries the
+  # federal itemized deductions.
+  2024-01-01:
+    - mt_wagering_losses_deduction
 
 metadata:
   unit: list
   label: Montana miscellaneous deductions 
   period: year
   reference:
+    - title: 2023 Montana Form 2 instructions, itemized deductions - gambling losses
+      href: https://revenue.mt.gov/files/forms/Montana-Individual-Income-Tax-Return-Form-2-Instructions/2023_Montana_Individual_Income_Tax_Return_Form_2_Instructions.pdf#page=39
+    - title: 2025 Montana Form 2 instructions, line 2 - federal standard deduction or federal itemized deductions
+      href: https://revenue.mt.gov/files/forms/Montana-Individual-Income-Tax-Return-Form-2-Instructions/2025_Montana_Individual_Income_Tax_Return_Form_2_Instructions.pdf#page=13
     - title: Montana Individual Income Tax Return (Form 2) 2024
       href: https://revenuefiles.mt.gov/files/Forms/Montana-Individual-Income-Tax-Return-Form-2-Instructions/2024_Montana_Individual_Income_Tax_Return_Form_2_Instructions.pdf#page=8
     - title: Montana Individual Income Tax Return (Form 2) 2022

diff --git a/...gov/states/nc/tax/income/deductions/itemized/claim_of_right/nc_modified_income_basis.yaml b/...gov/states/nc/tax/income/deductions/itemized/claim_of_right/nc_modified_income_basis.yaml
@@ -0,0 +1,13 @@
+description: North Carolina limits the claim of right repayment deduction to repayments of amounts included in adjusted gross income, as modified for North Carolina, in the earlier year, if this is true.
+values:
+  2014-01-01: false
+  2026-01-01: true
+metadata:
+  unit: bool
+  period: year
+  label: North Carolina claim of right repayment deduction uses North Carolina modified income
+  reference:
+    - title: N.C. Gen. Stat. § 105-153.5(a)(2)d
+      href: https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_105/GS_105-153.5.html
+    - title: "S.L. 2026-31, Section 1.8.(a) and (b) (effective for taxable years beginning on or after January 1, 2026) #page 5-6"
+      href: https://www.ncleg.gov/EnactedLegislation/SessionLaws/PDF/2025-2026/SL2026-31.pdf#page=5
diff --git a/..._us/parameters/gov/states/nc/tax/income/deductions/itemized/claim_of_right/threshold.yaml b/..._us/parameters/gov/states/nc/tax/income/deductions/itemized/claim_of_right/threshold.yaml
@@ -0,0 +1,16 @@
+description: North Carolina allows the whole repayment of claim of right income as an itemized deduction when the repayment exceeds this amount; smaller repayments are reduced by the federal two percent floor on miscellaneous itemized deductions.
+values:
+  2014-01-01: 3_000
+metadata:
+  unit: currency-USD
+  period: year
+  label: North Carolina claim of right repayment threshold
+  reference:
+    - title: N.C. Gen. Stat. § 105-153.5(a)(2)d
+      href: https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_105/GS_105-153.5.html
+    - title: S.L. 2016-5, Section 2.1.(a) and (d) (effective for taxable years beginning on or after January 1, 2014)
+      href: https://www.ncleg.gov/EnactedLegislation/SessionLaws/PDF/2015-2016/SL2016-5.pdf#page=4
+    - title: 2021 Form D-401 instructions, Form D-400 Schedule A line 8, Repayment of Claim of Right Worksheet
+      href: https://www.ncdor.gov/2021-d-401-individual-income-tax-instructions/open#page=20
+    - title: 2025 Form D-401 instructions, Form D-400 Schedule A line 8, Repayment of Claim of Right Worksheet
+      href: https://www.ncdor.gov/2025-d-401-individual-income-tax-instructions/open#page=20
diff --git a/policyengine_us/parameters/gov/states/nc/tax/income/deductions/itemized/other_sources.yaml b/policyengine_us/parameters/gov/states/nc/tax/income/deductions/itemized/other_sources.yaml
@@ -0,0 +1,18 @@
+description: North Carolina adds these deductions to the capped mortgage interest and property tax deduction to compute itemized deductions.
+values:
+  2021-01-01:
+    - charitable_deduction
+    - medical_expense_deduction
+    - nc_claim_of_right_deduction
+    - nc_wagering_losses_deduction
+metadata:
+  unit: list
+  period: year
+  label: North Carolina itemized deductions other than mortgage interest and property taxes
+  reference:
+    - title: N.C. Gen. Stat. § 105-153.5(a)(2)
+      href: https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_105/GS_105-153.5.html
+    - title: 2021 Form D-401 instructions, Form D-400 Schedule A lines 6 through 10
+      href: https://www.ncdor.gov/2021-d-401-individual-income-tax-instructions/open#page=20
+    - title: "2025 Form D-401 instructions, Form D-400 Schedule A lines 6 through 10 #page 20-21"
+      href: https://www.ncdor.gov/2025-d-401-individual-income-tax-instructions/open#page=20
diff --git a/...us/parameters/gov/states/nc/tax/income/deductions/itemized/wagering_losses/in_effect.yaml b/...us/parameters/gov/states/nc/tax/income/deductions/itemized/wagering_losses/in_effect.yaml
@@ -0,0 +1,17 @@
+description: North Carolina allows wagering losses as an itemized deduction if this is true.
+values:
+  2014-01-01: false
+  2025-01-01: true
+metadata:
+  unit: bool
+  period: year
+  label: North Carolina wagering losses itemized deduction in effect
+  reference:
+    - title: N.C. Gen. Stat. § 105-153.5(a)(2)e
+      href: https://www.ncleg.gov/EnactedLegislation/Statutes/HTML/BySection/Chapter_105/GS_105-153.5.html
+    - title: "S.L. 2026-41, Section 44.2.(a) and (b) (effective for taxable years beginning on or after January 1, 2025) #page 607-608"
+      href: https://www.ncleg.gov/EnactedLegislation/SessionLaws/PDF/2025-2026/SL2026-41.pdf#page=607
+    - title: NCDOR, Important Notice, Impact of Recently Enacted Laws on North Carolina Individual and Corporate Income Tax Returns (July 23, 2026, updated July 29, 2026), New Itemized Deduction for Gambling Losses
+      href: https://www.ncdor.gov/taxes-forms/information-tax-professionals/tax-bulletins-directives-and-other-important-notices/important-notices-and-frequently-asked-questions-personal-taxes/important-notice-impact-recently-enacted-laws-north-carolina-individual-and-corporate-income
+    - title: "NCDOR, FAQs Regarding Recent Session Law Changes (September 11, 2026), Q36-Q40 #page 11-12"
+      href: https://www.ncdor.gov/faqs-recent-session-law-changes/open#page=11
diff --git a/policyengine_us/parameters/gov/states/pa/tax/income/nontaxable_income_sources.yaml b/policyengine_us/parameters/gov/states/pa/tax/income/nontaxable_income_sources.yaml
@@ -8,9 +8,13 @@ values:
     - taxable_social_security
     - us_govt_interest
     - salt_refund_income
+    # PA-40 Schedule T line 4: the cost of bets comes off the winnings.
+    - pa_gambling_loss_offset
 metadata:
   unit: currency-USD
   label: PA nontaxable income sources
   reference:
     - title: 2021 Pennsylvania PIT Return Instructions (PA-40 IN) 
       href: https://www.pa.gov/content/dam/copapwp-pagov/en/revenue/documents/formsandpublications/formsforindividuals/pit/documents/2021/2021_pa-40in.pdf#page=8
+    - title: 2025 PA-40 Schedule T - Gambling and Lottery Winnings
+      href: https://www.pa.gov/content/dam/copapwp-pagov/en/revenue/documents/formsandpublications/formsforindividuals/pit/documents/2025/2025_pa-40t.pdf#page=1
diff --git a/...gine_us/parameters/gov/states/va/tax/income/deductions/itemized/reduction/applicable.yaml b/...gine_us/parameters/gov/states/va/tax/income/deductions/itemized/reduction/applicable.yaml
@@ -7,11 +7,15 @@ values:
     - real_estate_taxes
     - casualty_loss_deduction
     - va_capped_state_and_local_sales_or_income_tax
+    # Schedule A line 16a, gambling losses.
+    - wagering_losses_deduction
 metadata:
   unit: list
   period: year
   label: Virginia itemized deductions reduction applicable deduction sources
   reference:
+    - title: "2025 Virginia Schedule A Itemized Deductions, line 16a and Limited Itemized Deduction Worksheet line 1 #page 1-2"
+      href: https://www.tax.virginia.gov/sites/default/files/taxforms/individual-income-tax/2025/schedule-2025.pdf#page=1
     - title: 2024 Virginia Schedule A Itemized Deductions
       href: https://www.tax.virginia.gov/sites/default/files/taxforms/individual-income-tax/2024/schedule-2024.pdf#page=2
     - title: 2023 Virginia Schedule A Itemized Deductions
Original file line number	Diff line number	Diff line change
		@@ -0,0 +1 @@
		Count gambling winnings in federal gross income, limit the wagering losses deduction to 90% of losses from 2026 and to the head's and spouse's gambling, treat it as a Schedule A itemized deduction, and align the states that tax gambling winnings or build on federal itemized deductions.
Original file line number	Diff line number	Diff line change
		@@ -0,0 +1 @@
		Add North Carolina's itemized deduction for repaying income received under a claim of right (G.S. 105-153.5(a)(2)d), with a new claim_of_right_repayment input.