A romance scam occurs when a criminal uses a false online identity to build trust and emotional attachment, then exploits that relationship to steal money. These scams often involve fabricated emergencies, fake investments, or repeated requests for financial assistance.
If you have been a victim of a romance scam, it is natural to ask whether the loss can be deducted on your tax return.
Under current federal law, the answer is generally no — and the One Big Beautiful Bill Act (OBBBA) does not change that outcome.
The Tax Cuts and Jobs Act (TCJA) of 2017 eliminated the deduction for most personal casualty and theft losses for tax years 2018 through 2025, unless the loss is attributable to a federally declared disaster.
Because romance scams are personal theft losses and are not tied to a declared disaster, they are not deductible on a federal income tax return, even if:
The loss is substantial,
The fraud is well documented,
The scam was reported to law enforcement.
In addition, the TCJA eliminated the carryback of theft losses for losses discovered after 2017. There is no carryback relief available for personal theft losses such as romance scams.
The One Big Beautiful Bill Act, effective for tax years beginning after December 31, 2025, makes certain casualty loss rules permanent and slightly expands disaster relief.
Under OBBBA:
Personal casualty and theft losses remain deductible only if attributable to a declared disaster
The definition of qualifying disasters is expanded to include state-declared disasters, not just federally declared ones
General personal theft losses remain non-deductible
Importantly, OBBBA does not restore a federal deduction for personal theft losses such as romance scams. These losses remain non-deductible unless they somehow arise from a qualifying disaster, which is extremely unlikely in scam cases.
At this time, there is no federal deduction, credit, or adjustment that allows victims of romance scams to deduct their losses on a federal return. This remains true even after OBBBA.
New York State follows different rules.
For New York personal income tax purposes, theft losses may be deductible in the year the loss is discovered, provided the taxpayer can substantiate the claim.
Acceptable documentation typically includes:
Police or law enforcement reports
Bank records or international wire transfer receipts
Emails, messages, or communications showing solicitation and fraud
Any other credible evidence supporting the existence and amount of the loss
The burden of proof rests entirely with the taxpayer, and documentation is critical.
Romance scams are emotionally and financially devastating, but federal tax law — including changes under OBBBA — does not provide relief through a deduction. Limited relief may still exist at the state level, depending on jurisdiction and documentation.
Because these cases are highly fact-specific and closely scrutinized, professional guidance is strongly recommended before claiming any theft loss or responding to federal or state inquiries.
