As I reported back in July, §70433(d) of the Tax Code was changed by the One Big Beautiful Bill (OBBB):
(d) APPLICATION TO BACKUP WITHHOLDING.—Section 3406(b)(6) is amended—
(1) by striking ‘‘$600’’ in subparagraph (A) and inserting ‘‘the dollar amount in effect for such calendar year under section 6041(a)’’, and
(2) by striking ‘‘ONLY WHERE AGGREGATE FOR CALENDAR YEAR IS $600 OR MORE’’ in the heading and inserting “ONLY WHERE IN EXCESS OF THRESHOLD.”
But that’s not the Tax Code section governing issuance of W-2Gs. That Code section is §3402(q) of the Tax Code (and related regulations) and it was not changed by the OBBB. The question became, would the IRS interpret this to mean that W-2Gs would be issued (for slot play) at $1,200 or $2,000?
The IRS officially never answered the question. Today, the IRS released the draft Form W-2G for 2026 and the draft instructions for the W-2G. Those instructions state,
The minimum threshold amount for payments made in calendar year 2026 is $2,000.
So we have a bit of good news on the gambling front for taxpayers (and casinos). I expect that sign I pass daily noting “$1,199 Jackpots” will undoubtedly change next year to “$1,999 Jackpots.”
I do need to point out whether or not you receive a W-2G does not change whether your gambling winnings are taxable (they are). And given that in 2026 only 90% of gambling losses are deductible (though there are efforts to repeal that portion of the OBBB) keeping a contemporaneous gambling log is more essential than ever.
