UPDATE 12/17/25: Late in the year the IRS posted draft documentation finally confirming the change. Click here to read the latest update. The below remains for historical purposes.
In the midst of working on our piece about the implications of the One Big Beautiful Bill as it relates to tax deductions, reporting in other locations began to declare that the reportable jackpot handpay threshold had been increased from $1,200 to $2,000.
The American Gaming Association and U.S. Rep Dina Titus, of Nevada, were declaring victory. Others, including industry veterans like Vital Vegas and CPA Russell Fox weren’t inclined to agree.
The updated language at the heart of the debate is amending miscellaneous income, which some earn as a freelancer or contractor, or through things like contests and sweepstakes, from the previous $600 level to $2,000 (and will be indexed to inflation in the future). The national taxable jackpot level (filed on a different form than freelance income) was at $1,200. Whether a clause amending one type of income also reaches to another form of income is not so clear, and different tax accountants have offered differing opinions on this.
Right now the waters are too muddy to declare victory that this change occurred. We’re encouraging players to presume it hasn’t changed until more clarity comes out around this. The fact that many industry people are being very quiet on this instead of shouting this change from the rooftops (everyone everywhere seemingly has been asking for an increase for years) gives some credence to the fact that it probably didn’t happen.
As far as how the language will be interpreted, we received this comment from a longtime member of Brian’s fan club, The Rudies:
I’ve been a CPA for 40+ years…it takes months of reading and analysis of these law changes, before authoritative literature becomes available..so it’s not unusual to find out the final rules in 2 to 3 months.
Mark A.
Mark’s advice mirrors ours – for now, we wait. Any changes don’t take effect until next year anyway, so there’s no rush to clarify and finalize this. And that leads to one final question we’ve received on the topic:
Does “Tax Year 2026” mean taxes we file in 2026 for 2025 or taxes we file in 2027 for 2026?
Ellen A.
The tax year refers to the year the income was earned. So this takes effect on income earned next year, and those taxes would be filed in 2027. Of course, that presumes nothing changes between now and then.
The IRS can offer clarifying announcements to help confirm if is was indeed a change, for instance, and sometimes the intent of the law can help affirm what Congress meant to do and that is what is enforced – but again, in the aftermath of this it’s been awfully quiet out there in terms of Congressional members trumpeting the change. So for now, we advise players to presume nothing’s changed until we have final confirmation this indeed happened.
And for all involved, awaiting the final interpretation of the law isn’t a big deal, since we’re still six months away from when this could impact things. So for now, the only 2000 we have for certain is questions that remain unanswered.
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Any confirmation either way?
The IRS guidance that came out had no mention of the increase, which lends credence to what we previously shared. A panel also said at a recent conference that clarity was needed about this topic to be sure the increase occurred, which is another sign people interpreted the bill one way but haven’t had that interpretation confirmed by the IRS or legislators.
With the end of year approaching, it appears increasingly clear that nothing changed around jackpots with this year’s law.