Lawmakers push for increase in W-2G threshold
https://www.cdcgamingreports.com/nevada-illinois-representatives-want-jackpot-reporting-threshold-raised-to-5000/
They are proposing an increase to $5K. I would hope any change would also index the number to inflation moving forward.
Quote: rsactuarylong overdue. I hope this happens.
This will not happen. Just last year the IRS was trying to lower the threshold.
Quote: DRichThis will not happen. Just last year the IRS was trying to lower the threshold.
Thats what I was thinking.
The only possibility is that the research they did into the subject (supported by casino lobbyists) and which clearly did have an effect as evidenced by their rejection of lowering w2-g reporting has sunk in.
Too good to hope for?
Again with casino lobbyists presenting buckets of info and with this in their (the casinos) best interests maybe it could happen
Quote: darkozThats what I was thinking.
The only possibility is that the research they did into the subject (supported by casino lobbyists) and which clearly did have an effect as evidenced by their rejection of lowering w2-g reporting has sunk in.
Too good to hope for?
Again with casino lobbyists presenting buckets of info and with this in their (the casinos) best interests maybe it could happen
Why would the IRS want to lower it? They want as much income reported as possible.
Quote: DRichThis will not happen. Just last year the IRS was trying to lower the threshold.
It'll happen if Congress passes a bill, but yes, I doubt the Treasury Department is going to do this of its own accord.
(LCB Editorial link forthcoming, I think I wrote something similar here within the last few years already)
Quote: DRichThis will not happen. Just last year the IRS was trying to lower the threshold.
I'm also pessimistic, but the silver lining is that the gaming industry was able to prevent the threshold from being lowered. As darkoz said above, maybe this research into the pros/cons will sink in.
Quote: GialmereSo 1977 gives a date missing from that earlier thread. Using an inflation calculator I get 1200 1977 dollars is equal to 5026 2018 dollars.
Yeah, and $278.89 now is worth $1,200 then.
Quote: DRichWhy would the IRS want to lower it? They want as much income reported as possible.
The idea is it doesn't matter what the IRS wants.
Of course, I think the mandatory tracking that they supported along with the $600 threshold was totally stupid. In addition to being unduly burdensome on small locations (bars, parlors) that may only have a few machines, I think it could have also been counter-productive for the IRS. If we assume that most players incur a gambling loss for the year and that they would be more inclined to offset wins with losses (especially since the casino would essentially have to track accurately and mandatorily provide both player and the IRS with the information) players who had, in fact, lost overall would be more likely to offset.
I should imagine that a good percentage of the revenue comes from players who actually did lose money gambling overall for the year but are either unaware, unconcerned or too lazy to offset the winnings with recorded losses.
Quote: DRichWhy would the IRS want to lower it? They want as much income reported as possible.
Just hazarding a guess.
Casinos want higher w2g requirements so less wait and paperwork = higher profits.
Lobbying to politicians and their campaign donations since they want higher profits
Politicians influence the IRS decision results in success for higher w2g reporting.
So to answer your question its politics vs. Higher income reported to the IRS
From a slot manufacturer perspective and a casino perspective, a greater W2G threshold will enable them to create higher Variance machines that can return x times the bet more than they can now if the goal is to avoid a W-2G. This will be good for players who might like games where you can bet $5.00 and hit pays that are greater than a few hundred bucks with more frequency.
Quote: billryanI may be mistaken, but I think the top paying slot in AC when it first opened was $500.
I'd believe it, I believe that MickeyCrimm has stated that Montana has a limit of $600 for a jackpot even to this day.
Quote: Mission146I'd believe it, I believe that MickeyCrimm has stated that Montana has a limit of $600 for a jackpot even to this day.
That's the same in NYS
EDIT: think I read that wrong. You saying no one can win MORE than $600 or that is the jackpot trigger?
Quote: Mission146I'd believe it, I believe that MickeyCrimm has stated that Montana has a limit of $600 for a jackpot even to this day.
It is actually $800 and a max bet of $2. A player cannot win more than that and W2-Gs are never issued. Every cash out is paid by the attendant, sort of like playing at the Las Vegas airport. Each casino is limited to 20 machines, so they hear every ticket being printed and they’ll usually walk over and pay the ticket. Those printers are loud, like a dot matrix with a carbon copy that stays in the machine.
You'd think with the standard tax deduction going from whatever it was to $12K or $24K, they could raise the tax form amount to $10K, but I think the gov't wants to lower it to catch tax cheats instead.
BTW, those $10,000 CTR's could probably be raised to $75K based on inflation over the last several decades.
Quote: ChumpChangeThe NYS racinos have video lottery terminals (slot machine networks), and I haven't hung around to win anything there, but there might be a $600 tax form to fill out instead of the $1200 at non-racinos.
You'd think with the standard tax deduction going from whatever it was to $12K or $24K, they could raise the tax form amount to $10K, but I think the gov't wants to lower it to catch tax cheats instead.
BTW, those $10,000 CTR's could probably be raised to $75K based on inflation over the last several decades.
In NYS over $600 does not generate w2g. Just a jackpot. They check if u owe back nys taxes, child support, parking tickets or welfare reimbursement
I doubt they will raise the CTR. Even with inflation I notice the average American walks around with less than $10gees in his pockets. $30 or $40 gees in cash still is enough to raise suspicion
Quote: ChumpChange
BTW, those $10,000 CTR's could probably be raised to $75K based on inflation over the last several decades.
I would think just the opposite. Because people use less cash these days I wouldn't be surprised if they lowered it for Anti-Money laundering reasons.
https://www.10news.com/news/local-news/man-wins-more-than-1-6-million-from-penny-slot-at-local-casino
Quote: darkozThat's the same in NYS
EDIT: think I read that wrong. You saying no one can win MORE than $600 or that is the jackpot trigger?
Cannot win more. (Corrected to $800 by CrystalMath---Thanks!)
Quote: DRichWhy would the IRS want to lower it? They want as much income reported as possible.
IRS is part of the executive branch, they simply enforce the laws that the legislative branch enacts. In a Democracy of the people and for the people, the lawmakers work for their constituents. That is why the IRS would change it. Of course most people believe American democracy is not for the people, but instead whatever can be sold to the highest bidder.
Another minor thing is that of course player tracking with cards isn't 100% accurate, but it's a factor to consider. When the W2G thing first came out I'm sure there were no tracking systems whatsoever. It's not like the government can't request individual players win/loss if they wanna look into someone further.
Overall I think the amount is way too low today.
Quote: billryanDo the casinos routinely grant access to players records? Could the government search players clubs and match social security with dead beats or people on welfare? I know states supply casinos with social security numbers to seize the winnings, but does the casino allow fishing expeditions?
In NYS its reactive, not proactive.
Deadbeat could play for 10 years, then bam jackpot and ss first verified.
Players clubs dont even ask for ss at signup.
Plus after winning a jackpot, deadbeat can return to gamble without penalty until he either a) wins another jackpot or b) satisfies the debt collection
Quote: darkozIn NYS its reactive, not proactive.
Deadbeat could play for 10 years, then bam jackpot and ss first verified.
Players clubs dont even ask for ss at signup.
Plus after winning a jackpot, deadbeat can return to gamble without penalty until he either a) wins another jackpot or b) satisfies the debt collection
Player's Club SHOULDN'T ask for SS at signup. That's just asking, no, BEGGING for identity theft problems.
The raise to $5000 is a win/win for the players, and for the casinos.
Guess who loses? The poor slot attendant who will be hand paying less taxable jackpots, hence fewer tips.
Quote: FCBLComishCasinos are the only place to my knowledge that an asset has to be taken out of service to satisfy tax reporting rules.
The raise to $5000 is a win/win for the players, and for the casinos.
Guess who loses? The poor slot attendant who will be hand paying less taxable jackpots, hence fewer tips.
They will survive
On the other hand, you can be damn sure the government wants their money. I suspect if this does go through, they're going to "make a compromise" and **** us on something else....and chances are, it's going to be worse overall.
Quote: FCBLComish
Guess who loses? The poor slot attendant who will be hand paying less taxable jackpots, hence fewer tips.
Also the IRS, and the general population will be collecting less tax money. 99% of the population will not report their wins under $5000.
Quote: DRichAlso the IRS, and the general population will be collecting less tax money. 99% of the population will not report their wins under $5000.
You are not taking into account that 99% of the population will give it all back.
Quote: darkozYou are not taking into account that 99% of the population will give it all back.
Exactly. If everyone was inclined to keep accurate win/loss records, I think it's quite conceivable that the IRS would be raking in a lot less on this than they currently do.
Quote: AcesAndEightsFrom CDC Gaming Reports:
https://www.cdcgamingreports.com/nevada-illinois-representatives-want-jackpot-reporting-threshold-raised-to-5000/
They are proposing an increase to $5K. I would hope any change would also index the number to inflation moving forward.
Quote: Mission146Exactly. If everyone was inclined to keep accurate win/loss records, I think it's quite conceivable that the IRS would be raking in a lot less on this than they currently do.
If you take the standard deduction, you can't offset the wins. The number of people who are not in position to itemize was quite large before they doubled the standard deduction. I suspect it's now almost all of us.
^^^Exactly!Quote: JimRockfordIf you take the standard deduction, you can't offset the wins. The number of people who are not in position to itemize was quite large before they doubled the standard deduction. I suspect it's now almost all of us.
I itemized for 2017, but took the standard deduction for 2018. Had to eat the tax burden for my sole W2-G even though my 2018 gambling showed a net loss. At least I don't have a reason to keep records of my gambling, any more! :/
Quote: DRichThis will not happen. Just last year the IRS was trying to lower the threshold.
Quote: AcesAndEightsI'm also pessimistic, but the silver lining is that the gaming industry was able to prevent the threshold from being lowered. As darkoz said above, maybe this research into the pros/cons will sink in.
The legislation both of you are talking about did not include any provision to actually lower the reporting threshold for slot winnings to $600.
In the proposed legislation comments were requested regarding reporting thresholds, including the feasibility of reducing those thresholds to $600 at a future time.
The main thrust of the legislation was concerning the procedures for the reporting of "reportable gambling winnings" .
For lottery games in NY state, which includes VLTs, the threshold is a win of $600 or more that is also at least 300 times the amount wagered. A $600 win may or may not be reported to IRS. It depends on what amount was wagered to win it. If you go to a "racino" and win $750 on a hand of $5 fake video poker, you get a nonplayable only-cash-at-cage ticket, but you are not reported for purposes of income tax. The same win on a $1 game would be reported to IRS though. If you play a game like "88 Fortunes" at $8.80 max bet, you need to win $2640 to trigger tax reporting. Again, wins over $600 will be paid either as a ticket or handpay.Quote: ChumpChangeThe NYS racinos have video lottery terminals (slot machine networks), and I haven't hung around to win anything there, but there might be a $600 tax form to fill out instead of the $1200 at non-racinos.
Quote: itsmejeffFor lottery games in NY state, which includes VLTs, the threshold is a win of $600 or more that is also at least 300 times the amount wagered. A $600 win may or may not be reported to IRS. It depends on what amount was wagered to win it. If you go to a "racino" and win $750 on a hand of $5 fake video poker, you get a nonplayable only-cash-at-cage ticket, but you are not reported for purposes of income tax. The same win on a $1 game would be reported to IRS though. If you play a game like "88 Fortunes" at $8.80 max bet, you need to win $2640 to trigger tax reporting. Again, wins over $600 will be paid either as a ticket or handpay.
I disagree. Regardless of the amount wagered, a payout of $1200 or more will generate a W2g. This is a federal rule, and does not matter if it is Class III, or Class II (fake video poker). Where does $2640 come from?
Quote: darkozYou are not taking into account that 99% of the population will give it all back.Quote: DRichAlso the IRS, and the general population will be collecting less tax money. 99% of the population will not report their wins under $5000.
It shouldn't even matter whether they give it back or not. Playing these games in itself is a tax. To tax winning jackpots is double taxation.
Quote: RS$2,640/$8.80 = 300
The math is correct, but the law does not work that way. The correct answer is that on any slot jackpot, it does not have to be 300:1 in order to trigger a W2g.
Play a $100 slot machine, hit 3 bars, and your $1200 payout triggers the W2g. I watched people do this, and I was completely befuddled as to why they would so something like that. Many casinos have jackpots capped at $1199 to avoid the reporting requirement.
Again, this is Federal law.
Quote: TomGIt shouldn't even matter whether they give it back or not. Playing these games in itself is a tax. To tax winning jackpots is double taxation.
I agree 100% that the way gambling winnings are taxed is crazy. Having said that, the law is the law.
The law does work that way. VLTs are lottery tickets, not slot machines. They give off the appearance of a slot game, but they are not slot games. NY VLTs get the "ticket" from Schenectady, where the lottery lives. The law considers any winnings lottery winnings. This is how scratchers work too. A $3000 win on a $30 scratcher needs to be collected at lottery facility, but no W-2G.Quote: FCBLComishThe math is correct, but the law does not work that way. The correct answer is that on any slot jackpot, it does not have to be 300:1 in order to trigger a W2g.
Play a $100 slot machine, hit 3 bars, and your $1200 payout triggers the W2g. I watched people do this, and I was completely befuddled as to why they would so something like that. Many casinos have jackpots capped at $1199 to avoid the reporting requirement.
Again, this is Federal law.
If you go to Finger Lakes, which is VLTs, and win $1234 on max bet game of "88 Fortunes", you do not get a W-2G. If you go to Tioga, which is an actual casino, you will get W-2G on same win. The $5000 withholding threshold does apply. $1200 W-2G does not. At $600, they check you for back taxes and unpaid child support, which is why you have to go to cage. You get a W-2G at $600 only if wager was $2.00 or less.
Quote: Publication 140-W16 Q: Does New York State report the amount of lottery prize to the Internal Revenue Service?
A: Yes. The New York State Lottery is required to report all prizes where the proceeds from thewager are greater than $600 and at least 300 times the amount of the wager. A federal Form W-2G, Certain Gambling Winnings, will be issued to you reporting the total prize payment. In addition, Form W-2G will also show the amount, if any, of federal, New York State, New York City, and Yonkers income tax withheld.
Quote: FCBLComishThe math is correct, but the law does not work that way. The correct answer is that on any slot jackpot, it does not have to be 300:1 in order to trigger a W2g.
Play a $100 slot machine, hit 3 bars, and your $1200 payout triggers the W2g. I watched people do this, and I was completely befuddled as to why they would so something like that. Many casinos have jackpots capped at $1199 to avoid the reporting requirement.
Again, this is Federal law.
Itsmejeff is correct.
Federal law for slots does not apply to lottery tickets which is VLTs
I am witness to that living in NYS
Also, any jackpot over $5000 (I dont believe it matters about the 300:1 win) is not only taxable but MUST have state and federal taxes removed at the top tax bracket. Again something that is not the case for regular slots where you can collect every penny and pay the taxes end of year
Different rules. The word casino is on the building facade but VLT is the real name :)
Quote: FCBLComishI disagree. Regardless of the amount wagered, a payout of $1200 or more will generate a W2g. This is a federal rule, and does not matter if it is Class III, or Class II (fake video poker).
A $100 bet getting paid 12:1 would not get a W2G.
