IRS Confirms $2K Slot Jackpot Reporting Threshold Takes Effect Jan. 1, 2026
The Internal Revenue Service has confirmed that the minimum slot-jackpot amount requiring federal reporting will rise to $2,000 on Jan. 1, 2026.
LISTEN TO THIS ARTICLE:In a move long sought by the gaming industry, the IRS acknowledged this week that the higher reporting threshold included in the One Big Beautiful Bill Act will begin at the start of 2026. The change was reflected in a draft version of Form W-2G posted recently by the agency and implements language in section 70433 of the statute, which amended reporting requirements under Internal Revenue Code sections 6041 and 6041A.
Until now, casinos have been required to issue a Form W-2G to slot players who collect jackpots of $1,200 or more – a threshold that has not been updated since 1977, despite a long-running push to raise the W-2G reporting threshold by lawmakers, industry groups and IRS advisers. Industry groups and some lawmakers have argued for years that the $1,200 trigger is out of step with modern play patterns and inflation, creating unnecessary paperwork and operational friction for casino floors and patrons.
With the threshold set to double to $2,000, operators expect a meaningful reduction in the number of mid-size jackpot reports. "Raising the W-2G threshold to $2,000 brings information reporting into the 21st century", said a senior tax attorney who advises multiple casino operators. "It will reduce administrative burdens on properties and decrease the frequency of intrusive reporting conversations with recreational players who hit relatively common payouts on modern machines."
Casino compliance directors contacted by this reporter said the change should streamline floor operations and lower costs associated with printing, processing and mailing paper forms. Machines that pay frequent bonuses or clustered wins will be particularly affected, as many electronic slot variants routinely produce payouts that exceeded the old $1,200 threshold.
However, consumer advocates and fiscal watchdogs caution that raising the bar could curtail transparency for certain winners. "A higher reporting threshold means fewer wins are captured by federal reporting systems, which could reduce oversight of cash flows tied to gambling", said a policy analyst focused on tax enforcement. "Policymakers should balance administrative relief for businesses with the need to monitor large-value transactions."
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Regulatory Implementation and Next Steps
The statutory change is not retroactive: any jackpots paid in 2025 will still be subject to the existing $1,200 reporting rule. The IRS has included a project in its 2025-2026 Priority Guidance Plan to draft regulations implementing the amended thresholds under sections 6041 and 6041A, signaling that formal regulatory language is still being developed.
Officials at the agency said additional guidance will be released as those regulations are finalized, and casinos should monitor forthcoming instructions about recordkeeping, aggregation rules and interaction with state-level reporting obligations. State regulators may respond by adjusting their own reporting or compliance expectations, so operators with multi-jurisdictional footprints will need to coordinate internal policies across markets like Nevada, New Jersey, Michigan and others.
Tax professionals note that while the increased threshold will lower the frequency of W-2G filings, it does not eliminate tax obligations for players. Winners remain responsible for reporting taxable gambling income on their individual returns regardless of whether a W-2G is issued. "Players should remember that paperwork thresholds do not change underlying tax liabilities", said a certified public accountant who specializes in gaming taxation. "Even without a W-2G, a large jackpot can still generate federal and state tax consequences."
As the industry prepares for 2026, stakeholders – including casino operators, tax advisers and regulators – will be watching for the IRS’s formal rules, which are expected to clarify administrative details that affect compliance on casino floors nationwide.
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