As per the US-Canada Tax Treaty, Canadians and International patrons* can offset their gambling losses against their winnings. Jackpot winners who have had their gambling winnings taxed can benefit from this treaty.
A win in the US casinos can be exhilarating but soon that excitement will fade when you realize that a 30% withholding tax that has been deducted from your gambling winning. However, there are several casino games and lotteries on which you can obtain a gambling tax refunds.
As outlined by the IRS, these are:
• Slot machines
• State Lotteries
To obtain a casino tax rebate you need to keep in mind that the refund process normally takes 12-16 weeks. An ITIN application will be filled out and submitted on your behalf to the IRS. This ITIN number will become your permanent number which you can use as often as you need to file for a gambling refund. Finally a 1040NR will be filed on your behalf.
A 1040NR is a tax return, non-us resident must file to obtain a casino tax refund. Keep in mind these simple rules.
• If you are a winner for the taxable game that has been considered as an eligible gaming activity in the last three years.
• If you are a holder of the IRS Form 1042-S and the casino has offered that.
• If you are offset winnings with losses within the same tax year.
*Apart from Canadians, In addition to Canada the following other listed countries qualify: 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. These listed countries do not have to establish gambling losses in order to claim a full refund