Last Day to Comment on IRS Slot Jackpot Proposal

IRS_LogoThe IRS proposed dropping the minimum reportable slot jackpot win from $1,200 to $600 earlier this year. The IRS allowed individuals and businesses to comment on the proposal. The last day for that comment period is today, June 2.

A player that wins $1,200 or more at a slot or video poker machine on a single play is issued a W2G for that event. The player is required to file this form on that year’s tax return. Players may deduct gambling losses against this number, but only if the taxpayer itemizes deductions. Taxpayers that use the standard deduction will pay taxes on that win even if they posted a net loss for the year.

The gambling industry has additional concerns. Slots and video poker machines lock up when a reportable jackpot is hit. This causes a delay while the W2G is prepared by casino employees. A lower jackpot threshold would trigger reportable slot wins more often. Players forced to wait for every small jackpot win may not find gaming as fun as it was in the past.

Not only does this take the player out of action for about 15 minutes each time, the casinos would need more slot attendants to handle the extra demand. It would also create more work for casino accounting departments.

Tax revenue would also drop if players decided to stay home instead of putting up with the nuisance created by a $600 minimum W2G. They may also choose to play lower limit games. Both would hurt gaming revenue, which in turn would lower taxes paid by casinos.

Concerned players may leave a comment with the IRS here. The IRS has over 3,300 comments as of June 2. The American Gaming Association created a petition opposing the IRS proposal. It has more than 10,000 digital signatures, according to the group. An IRS hearing on the topic is scheduled for June 17.