- While the US casino industry is growing and the amounts of slot machine jackpots are growing, the low threshold for giving out an IRS Form W-2G is becoming a big issue.
- Experts in the industry, the AGA, and Silver State’s congressional delegation all support reforms to the current threshold of $1,200.
- However, the issue doesn’t appear to be serious for the Department of Treasury.
- No one knows when the solution to the problem will be available.
The low threshold for giving out an IRS Form W-2G is becoming a more serious issue for the growing casino industry in the US, even as the amounts of slot machine jackpots increase.
Casinos are supposed to issue Form W-2G to players who hit jackpots of at least $1,200. Additionally, they should report the won amount to the Internal Revenue Service. The income is taxable, and the individual is required to note it on their Form 1040 when filing returns.
Since the $1,200 amount was set in 1977, it hasn’t been reviewed. Jackpots have become bigger, and more states have approved casinos over the years.
Director of government affairs for Las Vegas-based Global Market Advisors, Brendan Bussmann said the authorities should modernize the threshold, just like they do other things affecting the gaming industry. He added that “raising the threshold would be a win for the industry, the patron, and IRS.”
Both the American Gaming Association and Silver State’s congressional delegation have realized there’s a need to amend the policy.
AGA’s Bob Miller called on President Donald Trump to address the issue, linking it to the reopening of casinos after the closures related to the pandemic. Miller had just become the new director of the Washington-based organization.
Also, he called on the Department of the Treasury to work on the IRS after Trump appealed to all departments in search of reforms and regulatory changes that would profit commerce and industry.
Miller said the AGA encouraged the Department of Treasury to update the threshold for reporting slot jackpots to a realistic level last year.
Whenever a player hits a jackpot of at least $1,200, the machine goes offline until the winner gets the processed form, said Miller.
In a letter to the assistant secretary of tax policy for the Department of Treasury, David Kautter, on May 13, 2019, Rep. Dina Titus, D-Nev. noted that the increased “threshold would reduce the paperwork burden on businesses and players while ensuring the tax code reflects current economic realities.”
Titus desired to get a reply by June 10, 2019, which means the Department of Treasury and the IRS aren’t taking the matter seriously.
The entire Silver State delegation supports Titus’ effort. Senator Catherine Cortez Masto has recently engaged with the two authorities to push for this important reform, said the senator’s communication director, Ryan King. King said Masto is looking forward to their positive response.
However, no one knows how long it will take to fix the issue. The Department of Treasury is silent on the matter. An IRS spokesman said the Treasury is in a better position to address the problem.