Canadians – How to Get Your Vegas Casino Tax Refund

What Happens in Vegas doesn’t have to stay in Vegas!

bigstock-Gambler-placing-a-bet-at-the-r-41521993Are you a Canadian who won in Vegas but the US Casino held back 30% percent of your winnings as tax? Have you asked yourself “how do I go about getting back my refund on those taxes?”

Casinos and other gambling establishments in the US typically withhold 30% of Canadian visitor winnings as per IRS requirements with some exceptions.

In order to qualify for a Casino tax refund, the following criteria needs to be met:

  1. You won in the last three years,
  2. Were a resident of Canada at the time of the winnings,
  3. You were issued a 1042-S form (typically looks like a receipt from a store or restaurant) as well as a Casino Tax Win Slip from the Casino where you won,
  4. Have the necessary identification documents for your Casino Tax Refund.

Canada formed a treaty with the US during 1996 wherein gambling losses can be offset against gambling winnings to either eliminate or at least reduce taxes on Casino winnings.  If you want to recover the taxes withheld, you will need to substantiate your gambling losses with proper documentation as proof and produce valid receipts.

The IRS provides the following guideline on their website: “It is important to keep an accurate diary or similar record of your gambling winnings and losses.  To deduct your losses, you must be able to provide receipts, tickets, statements and other records that show the amount of both your winnings and losses.”  Your diary should record the date, location, and type of your gambling activities, as well as amounts won or lost.  If you have winnings from blackjack, baccarat, craps, roulette, or big-6-wheel, there should not have been any tax withheld and you cannot use these when calculating your winnings or losses.  If the Casino did withhold tax, then all of the tax is refundable.

Note:  These records do not have to be submitted with the tax return, but must be available if requested by the IRS.

In order to claim your recovery, you must apply to the IRS for an Individual Taxpayer Identification Number (ITIN) as well as submit a tax return (1040NR).  In order to obtain your ITIN you will need to complete form W-7 which requires you to provide certified or notarized copies of your passport or a combination of two or more other pieces of identification.  These copies must be certified by the “issuing agency or official custodian of the original record”, “or notarized by a US notary public legally authorized within his or her local jurisdiction to certify that the document is a true copy of the original.”  U.S. notaries public are available at US embassies and consulates in Canada.  You can pay a Canadian authorized IRS “Certifying Acceptance Agent” to apply for the ITIN on your behalf.  A list of the Certifying Acceptance agents located in Ontario can be found on the IRS website.

The ITIN application can be submitted with your US tax return.  The tax return must include all winnings less losses and taxes paid in order to calculate whether or not you will be getting a refund.  There is a rare possibility that if your wins exceed your losses, additional taxes may need to be paid.

Once you have completed the ITIN (W-7) application and your US tax return (1040NR) and submit them, be prepared that it could take up to six months to process your return and refund.

So don’t be frustrated by the amount of paperwork.  Once you have it pulled together, it is pretty straight forward.

UPDATE:

IRS – Effective June 22, 2012 the IRS made interim changes that affect the Individual Taxpayer Identification Number (ITIN) application process. You must now be an accredited agent for the IRS in order to obtain an ITIN.  This requires taking a course and writing an exam.

Have you found yourself in this situation? I’d love your feedback. And here on my blog, you’ll get commentluv so don’t forget to leave a link back to your own blog too!

Until next time,

Maureen

 

 

29 thoughts on “Canadians – How to Get Your Vegas Casino Tax Refund

    • On June 22, 2012 the IRS changed the rules as to who could complete applications for tax refunds. We cannot apply to be an accredited agent until next year. How much tax did they withhold?
      Maureen

  1. I won $1500 at the Golden Nugget in Las Vegas (oct/2012).
    They withheld $450 tax. My 1042-S has all the detail including my
    name and address.

    What is your fee to recover this $450 tax?
    How do I go about getting the paper work to you.
    I do not wish to send my passport / driver’s license by mail.
    I am in Hamilton, Ontario.

    • Hi Kartik and congratulations on your winnings.
      In the summer of 2012 the IRS changed the way applications could be made for refunds. Only an accredited agent for the IRS is allowed to submit applications. This involves taking a course and an exam then applying between the months of May through August. Since I won’t be authorized until late spring of this year I suggest you contact the accounting firm of Bateman, Graham, Look Hong, 905.895.9457, located in Newmarket Ontario. They are the only agents I’m currently aware of that may be able to help you.

      Maureen

  2. Good afternoon,

    I have an assigned ITIN#, what would be your fee for filing the 1040NR on my behalf?
    I have 1042-S’s issued during 2011 and 2012, so I’m not sure whether 2 returns are required or if both years can be claimed on the 2013 filing.

    Thank you.

    • Hi

      Yes since you have your ITIN# we can help you submit the forms – you have to claim the refund for the tax year you won the money. The cost would be $250 plus HST for each year. Let me know if you have any additional questions, Maureen

  3. Maureen why are you being so misleading? Anyone can file these applications, the only changes are copies of documents are certified. You can recover your own gambling taxes by filling out a w-7 form and obtain an itin number along with filling out a 1040nr form. When in doubt call the IRS for help! Don’t be intimidated, do it yourself for free and don’t pay a cent to these shady accountants.

    • Hello.

      You summed it up perfectly as to why I and others complete these forms on behalf of our clients. While you may be very comfortable completing the necessary forms and requests many others are not. With many English is not their first language, others don’t know where to start, are illiterate or hate paperwork. A large number of individuals don’t want to deal with any form of any government, Canadian or American. I personally offer for free extensive information for individuals to pursue applying for their own credits or refunds where personal and business taxes are concerned. You may have the confidence and mastered the art of applications and paperwork, but there are many out there that are not as intelligent or self-assured as you present yourself to be.

      With that I’m going home now. Hope you had a great dinner M :-)

  4. Maureen, the casino withheld 30% of my craps winnings in Vegas last year. I read your information above (and I remember somewhere seeing on the CRA website) that craps winning are not eligible for withholding tax, however the casino did withhold $299.00 from me. I would like to apply to get these monies back and would like to try to do it myself since it’s only $299 dollars and I don’t want to lose half of it to fees. Would I be able to apply for a ITTN number myself? Thanks.

    • Hi Alex

      Congratulations on your winnings. I agree with you and that to the best of my knowledge tax should not have been withheld on your craps winnings. Anyone can apply for an ITIN it will just take some time and paperwork. You also need to be aware of the fact that this will not be a priority for the IRS. The IRS prioritizes their work based on collections and not payouts. It is definitely more cost effective for you to pursue getting the monies withheld back. Good luck, Maureen.

  5. Hi Maureen,
    Thanks for the very helpful information, but I’m stuck on the first line of W-7. When applying for the tax refund from a gambling winning, do I tick off box” a” or “b” for the reason for submitting form W7.

    • Hi Warren

      Box A is Nonresident alien required to get ITIN to claim tax treaty benefit and
      Box B is Nonresident alien filing a U.S. tax return

      Since you’re requesting a refund of tax withheld on tax holdings you would tick box A. It’s the start of the process required when dealing with the IRS.

      Maureen

  6. Hi,
    I actually called the IRS myself and they walked through filling out the forms. What do you recommend to do to prove wins/losses? Nobody tells you you need this proof till after you get back to Canada and we have no receipts.
    Thanks,
    Sarah

    • Hi Sarah

      I agree, there should be some information available when you’re in Vegas to let you know what your options are and what you need to keep. From my experience without proof of wins and losses the IRS won’t process your application.

      Maureen

  7. WOW WHAT AN ARTICLE AND SOME GREAT WRITING AS WELL AS I’M SURE TIME SET FORTH …..GOOD JOB MAUREEN

    I currently find myself in a position where I just returned from Saratoga Springs New York from the race track and all in all I had cashed a total of approximately 6 1/2 thousand dollars however they kept 30% which is near $2000 so although I lost big on my future wagers I know at least I have $2000 or so coming back however I would like to expedite this process I do not Know or have any idea how to do it I also do not have an ITIN number and I have never done this before personally I believe the easiest way to solve this problem worldwide for all tourists who decide to spend money in the great land of the US of A they should already be exempt as long as they provide for an ID and even maybe a passport that is the proper way of doing business I currently have a friend who bets On horses through telephone account wagering site that is based in one of those unknown states maybe South Dakota Montana don’t ask me where and this company is what I call on the ball an extremely sharp whereas he faxed them his information that is a Canadian citizen and there is no withholding tax AND NEVER AN ISSUE thats the way that’s over the phone through this company why because they know their business you go to the racetrack and you say I’m a CANADIAN citizen I don’t have. To pay tax again I am a Canadian and doesn’t anybody know the true rules around here that Canadians don’t pay tax guess what I’m sure they couldn’t do anything about it I like this top-of-the-line telephone account wagering system but they don’t even know that a Canadian does not pay tax or is not tax applicable they have no idea no matter what you tell them and guess what’s THE BIGGEST shame is because I’m sure many people come back to Canada from wherever they are and just feel that that winning money they were taxed and that’s the end of it I bet you 45% of the people who won Money either a don’t know that they are entitled to a refund back I’m talking about Canadians or B feel that it’s too small of amount say under $500 and like me this happened to me before was $400 and just doesn’t want to bother jumping through loops n hoops to get it back it’s absolutely at a ridiculous and something must be done about it to make it more user friendly. I stress again both governments must get together and make this program more user friendly but then again I’m sure the United States doesn’t want to be too user-friendly and doesn’t want to be too well known as think about how many dollars there UNLAWFULLY collecting from winning Canadians that’s why the US are crooks out and out C R O O K S lies CHEATS robbers and thieves
    FINALLY THE LAST PART OF MY RENT KIND OF SAYS THAT MAY BE THE GAMBLING INDUSTRY AS A WHOLE BECAUSE WE ALL KNOW HOW MANY CANADIANS GAMBLE IN THE STATES THE GAMBLING INDUSTRY AS A HOLD OF INCLUDES CASINOS AND RACETRACK AND ALL GAMBLING INSTITUTIONS SHOULD LOBBY THEMSELVES TO MAKE THIS RULE MUCH MUCH EASIER

    THANK YOU FOR THIS GREAT ARTICLE

    • Congratulations on your winnings and thank you for your comments. I can tell you’re someone that has opinions and can see and analyze where the inconsistencies are. Also, thank you for sharing your friend’s process of not having the tax withheld on winnings,I was not aware that could be done. My research was specifically for the Vegas winnings on that blog post but it’s always good to hear other examples of how tax issues are being handled. When speaking with others and doing research there seems to be a common opinion on why the 30% is withheld. That is, most individuals do not have the knowledge or resources to apply for the tax dollars to be reimbursed. And how few know that they should also be tracking their losses and keeping receipts? So a large percentage of the opinions believe its the IRS getting a substantial piece of a pie that is left behind and that is why it is more complicated than it should be, or completely unnecessary. Wishing you continued luck with the horses, Maureen

  8. Hi Maureen
    I’ve winner receipt in my hand from las Vegas casino in August 2013, but I don’t have ITIN, they holding my money as$900. So I want know how much you will be charge me, and how long will be take? Let me know please.

    Thanks
    Alison

    • Hi Alison
      I’m not sure if I have enough information to guide or answer you. Do you have a receipt from the casino indicating your earnings and the tax withheld? Had you been keeping track of your losses and kept that documentation?
      Maureen

  9. I won 4800 in atlantic city. I don’t have a players card so would not be able to show how much I have lost( even though it is a hellova lot)
    I only have a form W2G from the casino. Caesars said it is the only form they hand out.

    BIG QUESTION: Am I likely to get a refund if I can’t show losses? What portion of the $1600 tax I paid can I realistically expect to get back?

    • Hi Kathy and congratulations on your winnings. I’m not sure if there is any way around you collecting part of the tax withheld since you don’t have a record of your losses. I would suggest you call the IRS at 1.866.455.7438 and get their take on if it’s realistic to try and proceed. You won’t have to give them your name or any ID, just the fact that you want to recover some of the tax withheld and you have a W2G form. I would be very interested in hearing their response to your questions.
      Maureen

  10. Wonderful resource, Maureen. My question is this – how much of a loss do you need to evidence in order to recover the full amount of taxes withheld? Do the losses need to at least equal, or exceed, the amount won for a full recovery of withheld taxes? I have two slips with a total of $1620 in state and federal taxes withheld…I am willing to try the forms myself but not sure how to do so accurately and wonder if I should pay someone like yourself to do so for me. Oh, and one more question – the $270 in state taxes, are they recoverable as well?

    • Hi Michael

      Thank you for the compliment, now I will have to disappoint you. When I created the initial blog I did a lot of research and anticipated being licensed to apply for refunds. But the IRS changed the rules, made it more cumbersome and I decided to stay focused on my current business, and not branch out to the Vegas tax recovery sector. Since I don’t prepare the applications I can’t give you specific answers. I would suggest you attempt to complete the forms yourself, and if you get stuck call the IRS. Another suggestion would be to contact a Canadian company whose business is it to recover gambling taxes. Some of these companies will charge you based on what is recovered and not a fee for surface.
      Maureen

  11. Hello Michele

    Congratulations. Your ITIN number is specific to you, for any U.S. state that you have eligible taxable winnings in. You can only make a claim for a refund once per year so you would want to accumulate all your winnings/loss information and apply when you’ll no longer be gambling on U.S. soil for that year.
    Maureen

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