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IRS Shares Draft Guidance Related to New Slot Prize Tax Withholdings
The IRS is finalizing new rules related to changes in the federal tax code for gambling winnings, including payouts from slot play.
Updates to the federal tax code for tax year 2026 in the United States are nearing completion, with the Internal Revenue Service (IRS) close to finalizing rules for the period. Among the items submitted for final approval is guidance for taxpayers who have gambling winnings, with some of the biggest changes pertaining to slot winnings.
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IRS remits draft rules publication for gaming tax updates
The IRS has a draft version of revised instructions for Forms W-2G and 5754, both of which pertain to income from gambling winnings. The publication is only a draft, though, and still requires approval from the Office of Management and Budget.
Foremost among the updates reflecting recent changes to the US tax code for 2026 is an "increase in threshold for requiring filing of certain information returns and backup withholding." The new instructions state that "for calendar years after 2025, the minimum threshold amount for reporting certain payments and backup withholding…will be adjusted yearly for inflation."
For 2026, that threshold will be $2,000, should OMB approve these rules. This update will be especially pertinent to people who play slots at online casino sites for real money.
Ramifications of the new withholding rules for slot players
People who play online casino games for real money in Michigan, New Jersey, Pennsylvania, and West Virginia could see some changes to whether they receive a Form W-2G from the casinos they play with in 2026. According to these draft rules, the casinos would be required to remit a Form W-2G to players who have slot winnings of $2,000 or more during tax year 2026.
The current standard for tax year 2025 in that regard is $1,200. These new rules also provide for annual adjustments to this threshold, although there is no guidance for how large any increase to that threshold could be from one year to the next.
Otherwise, the adjustments proposed in this draft for people who use casino bonus codes in MI, NJ, PA, and WV will mostly go unnoticed. The Form W-2G is meant as an aid to help non-professional gamblers report their income from gaming winnings correctly, and a change to when casinos are required to fill out the forms will not substantially affect taxpayers in terms of their responsibilities to accurately report and potentially pay any amounts owed.
Although the threshold for automatic backup withholding will become higher each year assuming approval of these rules, the IRS considering all gaming winnings to be taxable income has not changed. Slot winnings under $2,000 for tax year 2026 for non-professional gamblers will still be taxable income on the federal level for most players, even if those bettors do not receive a Form W-2G.
This proposed change would make it more important for taxpayers to use the account statements provided when they play with the Golden Nugget Casino promo code to ensure they have an accurate account of their gaming activity for the year. MI, NJ, PA, and WV residents can get their Golden Nugget Casino promo code bonus here:
Otherwise, 2026 and beyond look like they will be business as usual for non-professional gamblers in the US regarding their federal income taxes.
Written by Derek Helling
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