How does a Canadian citizen who has won money in a United States casino recover the 30% money witheld ?
Thursday, March 18th, 2010 at
11:49 pm
I’ve been advised that Arizona has an agreement with Canada that allows them to immediately withhold 30% of all casino winnings by Canadians.
There is no tax on such winnings when the win occurs in Canada. I wish to know what the process is to recover this moneywon and witheld in the US.
Tagged with: canada • canadians • casino winnings • witheld
Filed under: Casino
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you have to file a tax return in the U.S. reporting the winnings as income earned in the U.S.
In the UnitedStates tax system you can deduct your losses up to the amount of your winnings.
call a tax accountant in the U.S;. and ask for the forms.
I think he would be required to file a non-resident alien tax return.
In general, nonresident aliens are subject to NRA withholding at 30% on the gross proceeds from gambling won in the United States if that income is not effectively connected with a U.S. trade or business and is not exempted by treaty. However, a recent change in the law provides for an Exclusion of Certain Horse-Racing and Dog-Racing Gambling Winnings from the Income of Nonresident Alien Individuals. The winnings and the tax withheld are reportable on Income Tax Form 1042 and Income Tax Form 1042-S
No income tax is imposed on nonbusiness gambling income a nonresident alien wins playing blackjack, baccarat, craps, roulette, or big-6 wheel in the United States. An Income Tax Form W-8BEN is not required to obtain the exemption from withholding, but an Income Tax Form W-8BEN may be required to inform the withholding agent that the person is a foreign person, that is, Income Tax Form 1099 reporting and backup withholding would not be applicable. When a Form W-8BEN is submitted to the withholding agent solely for the purpose of identifying the payee as a foreign person, a TIN is not required on such Form W-8BEN.
Most gambling winnings are subject to reporting on Form 1042-S. However, proceeds from a wager placed in blackjack, baccarat, craps, roulette, or big-6 wheel are not amounts subject to reporting.
On their U.S. federal individual income tax returns, nonresident aliens are taxed at graduated rates on net gambling income won in the U.S. that is effectively connected with a U.S. trade or business.
Tax Treaties
Gambling income of residents (as defined by treaty) of the following foreign countries is not taxable by the United States: Austria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, Russian Federation, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Tunisia, Turkey, Ukraine, and the United Kingdom.
Claimants must give you an Income Tax Form W-8BEN (with a valid U.S. Taxpayer Identification Number (TIN)) to claim treaty benefits on gambling income that is not effectively connected with a U.S. trade or business.
You may not have to pay taxes on winnings in Canada but you sure do in the USA.
You have to file a US tax return. You can take credit for taxes paid in Canada. If you are due a refund, it will be mailed to you.
You win money in the US, you follow their rules. They tax lottery winnings.
I think that 70% of a million dollars is a heck of a lot of money.