UPDATE 12/17/25: Late in the year the IRS posted draft documentation confirming the threshold for a reportable jackpot handpay will increase to $2,000 and increase based on inflation annually going forward, as part of changes implemented by the One Big Beautiful Bill. Click here to read the latest update. The below remains for historical purposes.
Some questions are evergreens here at Flip The Switch. This is one we’ve been getting consistently since our launch:
Do you think they will ever increase the taxable handpay limit? It doesn’t seem fair.
Andrew H.
In our last check-in, things seemed to be potentially improving because the proposal to lift the limit wasn’t coming from Congress, but from within the IRS. As it turns out, the IRS set the previous threshold, and so it would make sense the IRS could also revise it.
Of course, that proposal was made during the previous administration, and with the new administration came new leadership in the IRS with their own priorities. There hasn’t been much said about the subject since.
Some still have hope that there will be action in Congress, but as we’ve said in previous posts on the topic, we’re not holding out hope for movement there.
The main reason for this is simple: Raising the taxable threshold reduces the amount of jackpots reported to the IRS. And although IRS regulations say gamblers must report all wins and all losses, in practice most don’t, and the IRS is not in a position to try to find all of this unreported income.
This comment recently left gives you an example of how many think about it:
WHY does everybody want a handpay??? NO taxes if it is under.
Tracey O.
While the casinos aren’t required to report our gambling wins to the IRS when they’re under $1,200 in a single wager, we are. And so this is simply incorrect – a win below the jackpot handpay threshold is still supposed to be reported. And in turn, as long as you can itemize, your losses can be deducted against the winnings too. That’s how that comes to pass.
Raising the threshold would save both the casino and the player on paperwork, so casinos are on our side when it comes to this. But raising the threshold would work out like an unintended tax collection reduction because of how people handle their gambling winnings on their taxes, whether allowed or not.
With the current structure in Congress, we don’t expect a change here, barring a more purposeful restructure of how gambling winnings are accounted for, similar to changes made for those selling on platforms like eBay and Etsy. And those changes proved to be a negative for crafters, making them have to report income more carefully and pay more taxes accordingly, so be careful what you wish for.
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