Slot machine and video poker players who have won jackpots of $1,200 or more know the drill.
When the winning combo appears, the machine locks up. A slot attendant checks things out, disappears for a few minutes and reappears with an IRS form W2-G for you to sign. Until you sign the form, the casino is not permitted to pay your jackpot.
It’s been that way since 1977 when the $1,200 threshold was put into effect.
What would it mean for players if that threshold were to leap to $5,000? My friends at Strictly Slots magazine forwarded questions from a reader who zeroed in on the issue.
The questions come as the bipartisan Shifting Limits on Thresholds act, or SLOT, wends its way through the U.S. House of Representatives. The bill, introduced in March, follows a Congressional directive in December 2020 asking the Treasury Department to look into raising the tax form trigger.
With inflation, it would take about $5,788 today to have the buying power of $1,200 in 1977, and $1,200 today is the equivalent of about $248 when the threshold was established.
There’s no guarantee Congress will act, but what if it does? The reader raised these questions:
If the threshold is raised to $5,000, does that mean my jackpot of $4,000 for a royal flush on a dollar video poker game or $1,600 for four Aces on $2 Double Double Bonus Poker will be credited directly to the machine?
Answer: An increase in the tax reporting requirement would mean jackpots of up to that amount COULD be credited to your machine. It doesn’t necessarily mean they WOULD.