Increasing the $1,200 W-2G threshold

It seems that the amount of a slot win subject to taxes has been $1,200 for at least 25-30 years. Is there any chance that amount could be raised to $2,500 or even $5,000? If so, what would the approval process be?

I understand change is unlikely in these economic times when the government does not want to reduce tax collections. I suspect increasing the threshold could actually increase the amount of play in casinos.

Your thoughts?

This is a very timely question with tax day just a few days away.

I don't know how or when $1,200 was chosen as the W-2G threshold. Everyone I've asked has always said that it's been in place as long as they've been in the casino business. So I don't know whether the amount appears in some statute or the IRS chose the amount itself in some ruling.

In any case, to try to get the amount changed I would write my representative and senators and lay out the case why I think the amount is too low. I don't think it will be changed anytime soon, though, unless all slot players got together and hired a team of lobbyists.

I don't think raising the amount will increase how much people play. The only time the threshold comes into play is in machine selection. In a bank of progressives, I've chosen a machine with a jackpot under $1,200 even though higher jackpots were available just to avoid the tax form (shh, please don't tell the IRS!). Moreover, I think that the amount of action players give in a casino is determined by their bankrolls, not by potential tax consequences.

Best of luck in and out of the casinos,
John

Send your slot and video poker questions to John Robison, Slot Expert, at slotexpert@comcast.net. Because of the volume of mail I receive, I regret that I can't reply to every question.