Updated October 17, 2026. Quick answer: Line 8a of Schedule 1 is a deduction for a net operating loss from an earlier year, entered as a negative number in the preprinted parentheses. Line 8b is gambling winnings that are not from a trade or business, including lotteries and raffles. The loss figure comes from Form 172, and the winnings from your gambling statements.
Read box by box from the IRS form text: Form W-2G boxes explained, Form W-2G lottery winnings and Form W-2G poker tournament winnings.
Sales of business property (Form 4797), passive activity losses (Form 8582) and depreciation (Form 4562) for 2025, read line by line: Form 4797 line 10 and Form 4562 lines 6 to 13.
What lines 8a and 8b ask for
The form’s captions are short. Line 8a reads “Net operating loss” with parentheses printed beside it, and line 8b reads “Gambling”. Both are part of the Other income list in Part I of Schedule 1 (Form 1040).
Line 8a: net operating loss
The instructions say “Net operating loss (NOL) deduction. Enter any deduction for an NOL from an earlier year.” On how to enter it, they say “Enter the amount in the preprinted parentheses (as a negative number).” For the calculation they refer to another form: “See the Instructions for Form 172 for details.” The number for the line therefore comes from the Form 172 work, not from a statement mailed to you.
Line 8b: gambling winnings
The instructions say “Enter gambling winnings not attributable to a trade or business.” They also say what counts: “Gambling winnings include lotteries, raffles, a lump-sum payment from the sale of a right to receive future lottery payments, etc.”
Losses are handled elsewhere: “For details on gambling losses, see the instructions for Schedule A, line 16.” The Schedule A page covers that form. There is also a filing note: “Attach Form(s) W-2G to Form 1040 or 1040-SR if any federal income tax was withheld.”
Where the numbers come from
For 8b, collect the winnings you were paid during the year from your gambling records and from any Form W-2G you received. For 8a, use the loss carried from an earlier year as worked out on Form 172. Self-employment income is kept off these lines; the instructions say “you must use Schedule C, even if you don’t have any business expenses.”
Where it goes next
Lines 8a and 8b are part of the other income that line 9 totals. The form’s caption for line 10 reads “Combine lines 1 through 7 and 9. This is your additional income. Enter here and on Form 1040, 1040-SR, or 1040-NR, line 8”. The instructions say the same thing from the Form 1040 side: “The amount on line 10 of Schedule 1 is entered on Form 1040, 1040-SR, or 1040-NR, line 8.” The totals are covered on the page for lines 9 and 10.
Edition and line numbers
This page reads the 2025 Schedule 1 and the 2025 Form 1040 instructions, the current files irs.gov served on 2026-10-17. They are for the tax year 2025 return, filed in 2026. The schedule itself says “Attach to Form 1040, 1040-SR, or 1040-NR.” Check the tax year printed on the schedule you are filling in and use the line numbers on that year’s schedule, because a different year’s schedule can number or word its lines differently.
Common mistakes
- Entering the NOL as a positive number. The instructions say “Enter the amount in the preprinted parentheses (as a negative number).”
- Reporting business gambling here. Line 8b is for “gambling winnings not attributable to a trade or business”.
- Forgetting Form W-2G. The instructions say “Attach Form(s) W-2G to Form 1040 or 1040-SR if any federal income tax was withheld.”
Related: Schedule 1 (Form 1040), Schedule A, and Form 1040.
Sources
- Instructions for Form 1040 and Form 1040-SR (2025): https://www.irs.gov/pub/irs-pdf/i1040gi.pdf
- Schedule 1 (Form 1040), Additional Income and Adjustments to Income (2025): https://www.irs.gov/pub/irs-pdf/f1040s1.pdf
Read from the IRS documents linked above on October 17, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the account provider or the IRS is the right place to confirm anything consequential.