Novig taxes: how to file gains, losses and Maker Credits for 2026

Gross income includes “gains derived from dealings in property” (IRC §61(a)(3)), so a Novig year is taxable whether a form arrives or not. Novig’s Tax Reporting article describes a 1099-MISC when calendar-year redemptions reach $2,000 and net redemptions exceed $0. It reports net redemptions (redemptions minus purchases), not net trading profit. The Ludlow Member Agreement says Ludlow “will furnish IRS Form 1099 and other tax reporting documents”; no variant or threshold named.

On timing, the two documents differ. Help Center: “Forms are sent in the first two weeks of February for the prior tax year,” by email and physical mail. Member Agreement §5.9.2 and §5.10.2: forms available through the Member Portal or by email by January 31. Novig does not reconcile the two.

Filing from the Novig 1099-MISC: why its total is not the trading result

Novig’s Help Center describes the 1099-MISC total as net redemptions, which the article calls “the standard reporting method for sweepstakes platforms”; Novig has not said whether that rule carries over to exchange trades. Each filing route instead reports every position as proceeds minus cost, on the date it closed. So the routes below are filed from the positions, and the form is kept with them. Delivery, the identity check and how to request history are in what Novig sends at tax time.

Help Center 1099 rule

A 1099-MISC when calendar-year redemptions reach $2,000 and net redemptions exceed $0

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What that 1099-MISC reports

Net redemptions (redemptions minus purchases), not net trading profit

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When it arrives

Help Center: “Forms are sent in the first two weeks of February for the prior tax year,” by email and physical mail. Member Agreement §5.9.2 and §5.10.2: forms available through the Member Portal or by email by January 31. Novig does not reconcile the two

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Member Agreement §5.10

Ludlow “will furnish IRS Form 1099 and other tax reporting documents”; no variant or threshold named

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There is no IRS guidance on how event contracts are taxed, and no court has ruled on it. A gain counts when a contract settles or is sold. The table runs one worked year through each route: a single filer with $150,000 of taxable income and a $328,092 net gain, then the same filer with a $34,000 net loss.

Standard capital: Form 8949 rows, and Novig fills that carry no fee

Standard capital treats each contract as a capital asset. Every closed position is a row on Form 8949, short-term if held a year or less, and a settlement is a sale at its payout. On Novig the fee side of many rows is empty: the Help Center fee schedule puts pre-game straight trades at $0, so their cost is price times contracts. Live straight trades: taker coefficient 0.06 on every straight contract since October 15, 2026, applied while the event is in game. A net capital loss offsets other income up to $3,000 a year under §1211(b). The rows, worked: filing event contracts as capital gains.

Section 1256: Form 6781, the 60/40 split and the December 31 close on Novig futures

Every Section 1256 contract still held at year end is “treated as sold for its fair market value on the last business day” (§1256(a)(1)), and every gain or loss is split 60% long-term and 40% short-term, under the Section 1256 60/40 rule. What people filing this way point to: §1256(g)(7)(B) counts a board of trade designated as a contract market by the CFTC as a qualified board or exchange, and Ludlow has been a designated contract market since June 16, 2026. What is cited against it: §1256(b)(1) names no event contract, and §1256(b)(2)(B) excludes swaps and any “similar agreement”.

A contract on one game resolves with the game, so a Novig position open on December 31 is a futures contract or a game not yet settled. Novig publishes market data with one row per market per day: open interest, volume, OHLC; that is where a year-end close is read. A position with no published close on December 31 has no market price to mark it at; it is named, not guessed. The lines go on a filled Form 6781, Part I, lines 8 and 9.

Gambling: Section 165(d), the session log and the 90% limit on Novig’s first exchange year

Gambling treatment reports winnings on Schedule 1 and deducts losses on Schedule A, only when itemizing and only up to winnings (IRS Topic 419). From tax year 2026, the OBBBA 90% limit allows 90% of those losses (Public Law 119-21, §70114), so someone who wins and loses the same amount pays tax on 10% of it. Novig’s exchange trades all fall after August 4, 2026, so every one of them falls under the limit. There is no IRS guidance on how exchange trades group into gambling sessions; in the worked year, every position in one market that closed on one Eastern day counts as one session.

Pre-game straight trades

$0

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Live straight trades

Taker coefficient 0.06 on every straight contract since October 15, 2026, applied while the event is in game

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Published market data

One row per market per day: open interest, volume, OHLC

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• Settlement when the event resolves.
• A sale before resolution, as an offsetting order.
• Early Payout: with opposing positions on one game, the part of the payout that is the same whichever side wins, credited at once and listed as Instant Payout (Help Center).
• Fair Value Settlement: at the price just before the disrupting news; “a settlement, not a refund” (Help Center).
• A voided or pushed parlay leg: settled to fair market value (Help Center).

Novig’s Portfolio Balance is “Wallet Balance + Open Positions + Trade Credits”, so it mixes cash, unsettled positions and promotional credit and is not a trading result.

Early Payout

With opposing positions on one game, the part of the payout that is the same whichever side wins, credited at once and listed as Instant Payout

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Fair Value Settlement

At the price just before the disrupting news; “a settlement, not a refund”

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Voided or pushed parlay legs

Settled to fair market value

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Portfolio Balance

Wallet Balance + Open Positions + Trade Credits

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Under standard capital or Section 1256, a net loss offsets up to $3,000 of other income a year ($1,500 married filing separately) and the rest carries forward (§1212(b)). Under gambling treatment the loss reduces only the same year’s winnings and nothing carries to another year. In the worked year, a $34,000 net loss is worth an estimated $8,160 at the 24% bracket under either capital route, $720 a year for 12 years, and nothing under gambling treatment with no winnings to offset. What a losing year can be worth works the same example further.

Kalshi and Polymarket gains in prior years: the Section 1212(c) carryback

A net Section 1256 loss can be carried back three years against Section 1256 gains in those years, by election, checking box D on Form 6781 and filing Form 1045 or an amended return. The earlier gains need not come from Novig: for people who reported Kalshi or Polymarket US gains under Section 1256 in 2023, 2024 or 2025, a 2026 Novig loss can be carried back against them. Each loss path is in are prediction market losses tax deductible?

Novig’s fee is c × P × (1 − P) × N, charged to the taker; no maker fee. No IRS guidance addresses trading fees on event contracts; of the people we’ve seen file, the fee is counted in each position’s cost or proceeds, so its result is proceeds minus cost minus fees. Maker Credits work differently: credits are paid as cash within seven calendar days of the qualifying trade, and no IRS guidance addresses whether a credit is income in its own right or an adjustment to the trade. In live markets the credit is 25% of the taker fee actually collected, since October 22, 2026 (50% before). Every coefficient, the credit rates and the Referral Credit terms: Novig fees and Maker Credits.

Maker Credit Program

Credits are paid as cash within seven calendar days of the qualifying trade

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Maker Credit, live markets

25% of the taker fee actually collected, since October 22, 2026 (50% before)

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Referral Credits

From October 22, 2026: five $5.00 credits per qualifying referral, non-withdrawable, expiring seven days after issue

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As of October 25, 2026, Novig’s Help Center says it is offered nationwide except Nevada, Arizona and Michigan, by your physical location when you trade. Ludlow is the plaintiff in 6 federal suits against state officials over their gambling laws. These are cases about state licensing and gambling law; none decides how a contract is taxed. Each state, suit and order, dated, is in the Novig legal states guide.

• Prediction market taxesHow a prediction-market year is taxed, from the first trade to the filed return.
• Prediction market capital gains and Form 8949One Form 8949 row per closed position, the $3,000 loss limit and the carryforward.
• The Section 1256 60/40 ruleThe 60/40 split, the year-end mark and the three-year loss carryback.
• Form 6781 for event contractsA filled Form 6781 Part I, lines 8 and 9, and the box D carryback.
• The OBBBA 90% gambling-loss limitHow §165(d) works from tax year 2026, when only 90% of losses count.
• Prediction market losses and the tax deductionThe three loss paths, the Section 1256 carryback and what a losing year is worth.