The Internal Revenue Service (IRA) Advisory Council has suggested raising the jackpot tax threshold to $5,800, a proposal that will come as welcome news to slots gamblers, brick-and-mortar casinos, and US-based cruise lines.
jackpot withholding level of $1,200 in place since 1977
The Las Vegas Review-Journal reported on the IRS’ move to review the jackpot withholding level of $1,200 in place since 1977.
Jackpots of $1,200+ won on slots, known as a hand pay, currently trigger an onerous process. Operators program slot machines to freeze when a jackpot hits $1,200 or more. Casino staff then have to collect the gambler’s driver’s license and bring them IRS form W-2G to fill out. All US brick-and-mortar casinos and almost every cruise line departing from US ports follow the 46-year-old law.
The IRS Advisory Council’s recommendation to up the W-2G threshold to $5,800 will come as a major relief to all parties, with IRS Commissioner Danny Werfel backing the change at a recent House Appropriations subcommittee meeting in Washington DC. According to the LVR-J, the increase in the threshold is also backed by US Congresswoman Dina Titus and Chief Deputy Whip Guy Reschenthaler.
Reschenthaler stated: “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.”
The Representative added upping the threshold will do away with “this onerous red tape, ensuring the gaming industry can continue to support good-paying jobs, and foster economic growth” across the US.