‘SLOT Act’ Seeks to Increase Jackpot IRS Threshold to $5K
Posted on: March 3, 2022, 02:44h.
Last updated on: March 3, 2022, 03:11h.
Federal legislation introduced today by leaders of the Congressional Gaming Caucus would greatly increase the amount of money needed to be won on a slot machine spin to trigger an IRS report.
Creatively named the SLOT Act — or “Shifting Limits on Thresholds Act” — the bipartisan legislation comes from US Representatives Dina Titus (D-Nevada) and Guy Reschenthaler (R-Pennsylvania). The two lawmakers cochair the Congressional Gaming Caucus.
The SLOT Act, if passed and signed into law by President Joe Biden, would increase the jackpot tax reporting threshold from $1,200 to $5,000. That’s a more than 300% surge.
Titus and Reschenthaler argue that the current IRS slot threshold, which hasn’t been touched since 1977, is long antiquated and due for a major adjustment. Ongoing inflation has only further necessitated a change, they say.
Due to inflation, the number of jackpots hitting that threshold, triggering a shutdown of the machine and necessitating excessive paperwork requirements for the patron, has increased dramatically,” said Titus. “This creates an unnecessary burden on the gaming industry, an economic driver for Southern Nevada and other communities nationwide where slot machines exist.”
Industry Support
US tax laws require that a casino suspend a slot machine’s operation any time a play wins $1,200 or more during a single spin. In the event of that happening, casino employees are tasked with completing a W-2G form. The IRS tax document is for taxpayers to report their annual gambling winnings as income.
The American Gaming Industry (AGA) naturally lent its support for the SLOT Act. The casino trade group says increasing the mandatory W-2G threshold would help ease “unnecessary administrative burdens on casino operators.” The AGA concluded that the bill would modernize the IRS’ regulations on slot machine jackpots.
Based on the US Labor Department’s Consumer Price Index, $1,200 in 1977 is the equivalent of $5,567 today.
Reschenthaler, whose state is now home to one of the largest gaming markets in the United States, says the $1,200 slot jackpot IRS activator is costly for casinos.
“Because the threshold has not kept up with inflation, it has resulted in a drastic increase in reportable jackpots, which trigger tax burdens for winners and compliance burdens for casinos. Increasing the threshold will eliminate this onerous red tape, ensuring the gaming industry can continue to support good-paying jobs and foster economic growth in Pennsylvania and across the country,” Reschenthaler said.
Tax Concerns
Fewer mandatory W-2G forms could result in less of the slot winnings being properly reported to the IRS.
Gamblers are required under law to report all of their gambling wins as “other income” on a 1040 tax form. But recreational gamblers often fail to do so. The IRS W-2G form is one way the federal government makes sure it receives its share of larger wins.
The US Treasury Department in late 2020 was ordered by Congress to commission a study into how raising the slot tax form threshold might impact overall gaming taxes. The report is nearly a year overdue.
“While I believe appropriate taxes should be collected on winnings, raising the threshold would reduce paperwork and ensure this is accomplished more efficiently,” Titus concluded.
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Last Comments ( 25 )
They should change it because then you don’t have to wait on someone to pay you and stop your game great idea
Thanks for finally writing about > 'SLOT Act' Seeks to Increase Jackpot IRS Threshold to $5K < Loved it!
I think it is terrible that any employee has to rely on tips for their salary. After a patron pays for service they are not obligated to tip, but we do for what we consider "good" service or over and beyond. Casino workers should be paid by the owners, not the casino patrons. The casino makes a lot more than the people playing, so I feel a jackpot increase is overdue. And the casino workers should talk to owners about salary, not the patrons. I always tip but I don't want to feel that I have to or that I'm contributing to someone's salary. Your job should pay you a decent wage. It's only fair
This will definitely affect the slot attendants. As mentioned before, the industry relays on tips and only 20% of total daily jackpots are over $5k. Hundred of thousand employees will lose their job or be obligated to find a second job to keep up with the monthly bills.
It’s about time and this should only be the first step of changes to the tax code so that people are only paying taxes on true profits for the whole year!! Why do you have to itemize to claim gambling losses??? Because the rotten government wants to tax you on jackpots that are not really profit by years end!!!
Is there any idea when this law will be put emplace? Do you really think the IRS will allow $1200 to $5000 and miss out on the $3800 in bewteen charted Tax money after giving money out for the last 2 years ? What happens to all the clerks who work in slots who depend on tips for a living ? 25,000 jobs just throw into the garbage across the USA ?
No one should have to report gambling winnings because everyone gives their so-called "winnings" right back. No one wins at gambling It's a terrible addiction and very dangerous.
$1,200 in 1977 is equivalent to $5,618.14 in 2022. This is a no brainer. https://www.usinflationcalculator.com/
As a slot attendant this would destroy our income. Sunday, for example, only 109 jps and only 5 of those were 5k or more. We rely on tips for our wages! Poker machines pay 4k on royal and 4 of a kind so this would eliminate our regulars there. It would also decrease the amount of jobs due to less jackpots. The state, local, federal taxes that are generated would drop tremendously as well. This would be life changing in a bad way for many workers like myself who have been in the industry for years. Myself almost 10. Also, with not much time to prepare as the cost of everything is going up and this would diminish our income dramatically. As it is we work very hard and many don't tip. 10k plus and no tip. Newbies who don't tip causing us to rely on regulars who tip and happen to win. With little to no time to even attempt to find anothr job that supplies a similar income, the bills don't stop for us and our families. In a industry that makes so much money but doesn't share it, rather make us depend on people to tip generously which only happens for regular frequent players. 5k is an extreme jump and while if it were to change to perhaps 2k or 2500 that would also effect us but far less. Again out of 109 jps only 5 were 5k or more. 5 jackpots.
First world problem Legalize pot first
Its good for everybody how can someone justify a 1200 jackpot when somebody like me lose 1000 and then 5 minutes later hit a jackpot which i only won 200 because the other 1000 are mine the way it is rightnow its a terrible injusticia law change it
No, They would not need to put slot dept, cashier's out of work, Hopefully they could actually take care of the slot players like giving change not wait 20 minute for attendant to show up when requesting either machine is malfunction and not working or money is jammed and payout in a quick time frame.
It should be adjusted on the sole merit of inflation...1200 in 1977 is not the same as 1200 in 2022.... Cost of living increase maybe?
So Dina Titus is looking to put a lot of her registered voters out of work? Slot dept, cashiers, accounting will all be cut back even further.
Thank You for giving this information.