Slot Jackpot Tax Reporting Threshold to Increase in 2026

^{Congress approved a higher jackpot reporting threshold on slots back in July, and the IRS has since confirmed the rule will officially take effect in 2026. (Photo: Antimo Andriani / Alamy)}

The Internal Revenue Service has confirmed that a new, higher reporting threshold for slot machine wins will go into effect beginning on Jan. 1, 2026, reducing the number of jackpots that casinos must issue tax forms for next year.

Under current rules set back in was set in 1977, land based and online casinos are required to issue tax forms to slots players who win $1,200 or more. 

Threshold to Increase with Inflation Moving Forward

Gaming industry officials have long noted that the typical size of slots wins has increased significantly in the nearly 50 years since the $1,200 reporting requirement was set. Congress changed that threshold in the One Big Beautiful Bill Act (OBBBA), which was signed into law in July.

Under the new guidelines, casinos will now have to issue a Form W-2G to slots players who win at least $2,000. According to the Las Vegas Review-Journal, the IRS has said that additional guidance on reporting will be forthcoming as regulations are finalized. 

In addition, the threshold will increase further in future years.

“For calendar years after 2025, the minimum threshold amount for reporting certain payments and backup withholding on certain information returns, including the Form W-2G, will be adjusted yearly for inflation,” the IRS wrote in its guidance for those filing W-2G forms.

Notably, this change doesn’t apply retroactively to jackpots that were won in 2025. So while many players will be filing their taxes for this year in early 2026, the changes won’t be seen until players start winning jackpots next year. 

Since all gambling winnings are taxable regardless of amount in the United States, this won’t impact what individuals will be expected to report on their returns.

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Other OBBBA Changes Less Favorable for Players

While the reporting threshold change has been welcomed by the gaming industry, officials had hoped for an even more dramatic increase given how long it has been since the $1,200 threshold was put into place.

“It’s not the $5,000 we wanted,” American Gaming Association President and COE Bill Miller said in October during the Global Gaming Expo. “But we are getting there, and we take the win and we will continue to work to get to that $5,000 number.”

However, not all of the changes included in the OBBBA have been positive for gamblers.

One provision in the OBBBA caps the amount that gamblers can deduct for gambling losses and other related expenses to 90% of total losses. That means that a gambler who only wins a small amount could owe far more in taxes than their actual profit in a given year. In fact, an individual could break even or even lose money during the year, but due to a high volume of wins and losses, still owe federal taxes.

While Representative Dina Titus (D-Nevada) introduced a bill that would restore the ability for individuals to deduct the full amount of their losses on their tax returns, no such legislation has passed, meaning that the reduction to a 90 percent deduction is expected to go into effect for 2026.

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