The IRS Commissioner is contemplating a hike to the slot tax threshold.
The top authority at the Internal Revenue Service (IRS) endorses boosting the maximum amount a slots player can win before a casino needs to issue the player a W-2G filing form for reporting their winnings as taxable income.
Under the current federal rule, a payer or casino must give a W-2G form to a slots player who obtains $1,200 or more on a slot machine. This threshold has been the same since the rule was implemented in March 1977.
Recently, during a hearing in Washington, DC, IRS Commissioner Danny Werfel expressed his support for increasing the slot win threshold. Werfel mentioned his acceptance of the IRS Advisory Council's proposal from November to transition it to $5,800.
Werfel conveyed, "I think it's very beneficial to have input from the taxpaying community and our Advisory Council on when thresholds may be outdated. The decision about something like that is of a regulatory nature, and thus the authority lies with the Treasury Office."
Werfel also conveyed that the IRS Advisory Council's suggestion "is under serious consideration" at the Treasury.
Overdue Shift
US Representatives Dina Titus (D-Nevada) and Guy Reschenthaler (R-Pennsylvania) have been pushing for regulatory change at the Treasury regarding the increase of the slot tax threshold. They've proposed legislation to perform this if no change arrives.
In 2022, Titus and Reschenthaler introduced the "Shifting Limits on Thresholds Act," concisely called the "SLOT Act." These co-leaders of the Congressional Gaming Caucus, where Joyce is also a member, state that the $1,200 threshold produces unnecessary overhead and paperwork for casinos, disrupts the player's gaming experience, and removes a slot machine from service.
The value of $1,200 in 1977 is comparable to approximately $6,200 today. The SLOT Act has been reintroduced to Congress and suggests escalating the threshold to $5,000.
"Due to the threshold not keeping pace with inflation, it has led to a substantial increase in taxable wins, which entails tax burdens for winners and compliance obligations for casinos," Reschenthaler detailed. "Increasing the threshold will eliminate this cumbersome paperwork, guaranteeing the gaming enterprise can carry on supporting good-paying jobs and fostering economic progress in Pennsylvania and around the country."
Potential Losses for Slot Attendants
While casinos and the gambling community might favor increasing the tax threshold for slot victories, there's a potential downside in that slot attendants may face loss of jobs and reduced pay.
Slot attendants are casino workers who react to slot jackpots exceeding $1,200 to provide the winner with the W-2G form and distribute their winnings. It is common for the winner to tip the slot attendant.
As a slot attendant, this would devastate my income," a slot attendant named Sam told us.
Sam estimated that less than 5% of slot jackpots he responds to surpass $5,000.
"This would be life-changing in a detrimental way for many workers like myself who have been in the industry for decades," he continued.
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Source: www.casino.org
