I was recently at a tournament where the topic of conversation at the table was centered around taxes paid on poker winnings in the US. There seemed to be much confusion in this matter, and naturally everyone turned to me because I write for Casino World Magazine, but much to their dismay, I really wasn’t 100% sure came up with:
Are only Canadians exempt from this tax?
Can I get my money back if I am from another country?
You are eligible if you are a non-US resident. You must also be able to prove that you were a non-resident of the US at the time of your win. There are other treaty countries that qualify.
How much can I get back?
Canadians need to be able to substantiate their gambling losses, as the amount of their refund depends on the amount of gambling losses incurred in the United States throughout the calendar year.
The IRS will accept a diary of your winnings and losses. Your diary should contain the following information:
• The date and type of gambling activity
• The location of the gambling establishment
• The names of other persons present with you at the gambling establishment
• The amount(s) you won or lost
Also, keep any wagering tickets, win/loss tax statements, receipts from cashing cheques at the casino or withdrawing money from an ATM machine in or near the casino.
Poker players should keep “buy in receipts” for tournaments and a record of money won and lost in cash games in the US for the year of taxable wins.
You cannot use losses from the following games to offset your winnings as they are exempt from tax: baccarat, blackjack, craps, roulette and big-6 wheel. If the casino deducted tax on an exempt game you are entitled to a complete refund without reference to losses. (That’s good to know!)
After I’ve won, how much time do I have to obtain a refund?
One to go back three years to obtain a refund. Taxes on winnings prior to this period are statute-barred from any recovery. If you have won in the current year, refunds cannot be claimed until the beginning of the following taxation year.
How long will it take for me to get my money back?
In our experience, a refund takes on average 12-15 weeks to receive. If you have your ITN#, a refund takes on average 6-9 weeks to receive.
What documents are needed to make a claim?
For those of you who engage in other table games while on your journey: what about other gaming activities that are taxed, like lotteries and keno?
Can you help me get my money back?
Yes. All taxable gaming activities in the US such as wins in casinos on slot machines, gaming tournaments (such as blackjack and poker), lottery wins, dog/horse wagering, keno and game show wins are included.
Is this income taxable in Canada?
For non-professional gamblers, gambling income is not subject to tax in Canada.
In what currency are refunds paid?
Refunds are paid in US dollars.
What is an IRS form and when should you get one?
The IRS form 1042-S is issued to players and is also sent to the IRS by the Casino for certain gambling winnings as follows:
• Winnings of $600.00 or more from state lotteries and other wagering transactions in which the winnings are at least the amount of the wager.
• Winnings of $1,200.00 or more from bingo and slot machines.
• Winnings of $1,500.00 or more from keno.
• Winnings of $600.00 or more from horse racing, dog racing or jai alai.
Three easy steps to getting your tax money back when using a refund management service:
1. Upon receiving your winnings and paying your withholding taxes at the casino or gaming facility, you were given a win slip or a form 1042-S, which states the amount of withholding tax paid.
If you lost or misplaced it you can easily request a copy from the Casino or Gaming Facility where the tax was paid. Submit your documentation to a refund managemet service and the process is underway.
2. The application is submitted with your win slip in order to obtain an IRS Individual Taxpayer Number (ITN). This process takes between 6 to 8 weeks.
If you have already been issued an ITN number, you can proceed to Step 3, avoiding the 6 to 8 weeks processing time. Once you have been assigned an ITN number, it is yours to keep and reference for years to come, expediting the recovery of your winnings in the future.
3. Once your ITN number has been assigned, the refund management company of your choice prepares and submits a non-resident tax refund on your behalf. Approximately 6 to 8 weeks after we submit this form, you will receive a refund, mailed to your home directly from the IRS.
So there you have it! I hope this helps and answers most of your questions in regards to this matter.
Thank you all for your continued support. I look forward to hearing from you all. If you have any comments, questions, or requests please feel free to message us on Facebook. Till next time. Don’t forget to tip your dealers and wait staff as they work very hard to make your playing experience a pleasant one.
May you be blessed with good health and good luck!