Printable View
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.
https://www.casino.org/news/slot-act...reshold-to-5k/
Bout time
Don't get too excited just yet.
This has been tried a number of times throughout the years, and has always failed.
This time looks the most promising, but it's far from a done deal.
While a $5k limit would put it back to the intended value in 1977, when $1200 was worth $5000 today, it's not quite so simple. The $1200 has been left in place in order to give more visibility into money laundering and tax evading. Thus, the IRS doesn't love the idea of increasing that threshold by over 4x.
Similarly, notice that our highest bill in circulation is $100, even though $100 is worth less than $20 in the early '70s was. We need a $500 bill brought back, but we're not getting one, for similar reasons. In the 1970s, $10,000 bills were still circulating!
In the 1970's most of the slot action was either three-coin nickels or three-coin quarters. So $1200 or higher jackpots were infrequent. Betting 3 quarters a spin it would take a jackpot paying 1600 for 1 or higher to trigger a W2-G.
Today is much different. Even on whats called penny slots there are plenty of $8 and $9 bet levels. The equivalent of a 75 cent bet in 1975 would be about $4 today. A jackpot of just 300 for 1 will trigger a W2-G.
There are plenty of $8 bets on machines in the casinos. A jackpot paying just 150 for 1 triggers a W2-G.
This all means considerably more paperwork for the casinos as jackpots of 150 for 1 or 300 for 1 are hit many times a day.
When you trigger a $1200 or higher handpay the machine locks up. The floor people come around, always two so there are witnesses. They take your ID and SS card then have to go type up the paperwork. Then deliver it back for you to sign before you get paid.
Because of the higher bet levels today the hired help spend considerable more time, than they did back in the day, doing the paper work.
I think the casinos are looking to cut labor costs by raising the threshold to 5K.
This would be great for advantage slot players. Obviously more money in their pocket & also not drawing as much attention to themselves.