As of July 1, 2008, casinos are required to check an online database of persons who are delinquent in child support payments prior to awarding cash jackpot prizes that require an IRS form. If the winner of the cash prize is listed on the database, the casino is required to withhold the amount of the child support delinquency and submit it to the State. The withheld funds are directed to the Colorado Department of Human Services to be applied toward the delinquency. If the delinquency is less than the cash prize, the remainder is paid to the winner.
On July 1, 2011, the intercept program was expanded to include debts for outstanding criminal restitution. Casinos still perform only one search, but the search checks for outstanding debt in both areas and forwards any intercepted amounts to the State. The withheld funds are first applied by the Colorado Department of Human Services to any delinquent child support, and next by the State Judicial Department to any outstanding criminal restitution. Any remainder is paid to the winner.
Another expansion to the intercept program became effective on January 1, 2012, and includes certain unpaid debts to the State. As before, casinos perform a single search which subsequently checks for arrears in child support, criminal restitution, and state debt. In the event a patron has debt in all three areas, his/her winnings are intercepted and the debts are applied in the following priority: Colorado Department of Human Services, State Judicial Department, and finally Colorado Department of Personnel and Administration. Any remaining winnings after satisfying any outstanding debt in these areas are paid to the patron.In early 2014, the Colorado Department of Personnel and Administration (DPA) database was added to the registry in conjunction with the development of a single intercept architecture called the Master Intercept Repository (MIR). Intercepts on behalf of DPA can include debt which has accrued through contract, subrogation, tort or operation of law.
The MIR centralizes the intercept process for outstanding child support costs, criminal restitution and other court fees, and state debt certified to DPA. The MIR serves as a single point of record for DOR divisions (Gaming, Racing, Lottery and Taxation) to effect intercepts for these outstanding debts and will reasonably protect citizens from accidental multiple intercepts while placing DOR in a position for optimal data integrity.
After comparing a winner’s profile to the MIR and intercepting any amount due, casino staff will assist winners of large jackpots with the necessary federal United States Internal Revenue Service (I.R.S.) forms, notify the I.R.S. of the jackpot amount and provide a W-2G form to the winner to be filed with the winner’s federal income taxes.
For smaller jackpots, it is the responsibility of the taxpayer to include casino winnings on personal tax forms as taxable income.
An IRS W-2G form is required for all slot machine jackpots above $1,200, certain poker jackpots above $600 and poker tournament prizes above $5,000.