Slot jackpot tax increase to go into effect in time for 2026 taxes

The IRS has now published updated confirmation that the casino slot jackpot tax is to be almost doubled in 2026.

An X post by Vital Vegas stated: “Sources say the IRS will officially confirm the reporting threshold for slot jackpots increases from $1,200 to $2,000 starting Jan 1. Now, mad dash for casinos to implement the change.”

The One Big Beautiful Bill Act (OBBBA), which was reported in July this year, stated that a measure to increase the minimum amount that has to be reported on a jackpot win on a slot machine was set to be introduced.

Now, an amount of $2,000 (£1,500) will come into effect on January 1, 2026, and this is set to increase every year in line with inflation.

Casinos are now rushing to implement the change

The previous threshold of $1,200 (£900) has been in place in casinos since 1977, marking the first significant change in nearly 50 years.

Up until the 1^st of January 2026, casinos were required to hand pay slot wins for prizes of $1,200 or more by the federal tax code. As such, the player is issued a W-2G tax form to report any gambling winnings, and this is then filed with the IRS.

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 minimum threshold amount for payments made in calendar year 2026 is $2,000,” said the IRS in a document regarding the change at the start of 2026.

This increase has taken months to officially be confirmed, leaving thousands of casinos required to update regulations for the new $2,000 threshold.

That could take time, meaning casinos may not be in alignment with the January 1 date for the IRS update on this threshold.

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