Dear Forum members,
Does anyone have knowledge and experience with this. How are gambling winnings taxed for Canadian residents gambling in the US while on vacation? Any general knowledge would be great thanks.
Wino
AFAIK, resident aliens must pay US tax on income made in the US. If you are a visitor, it depends on the tax treaty between the two countries. I can't imagine that a Canadian resident would be liable for US tax on a winning in the US. But, you'd need to talk to a Canadian accountant.
Last edited by Norm; 01-11-2016 at 05:40 PM.
"I don't think outside the box; I think of what I can do with the box." - Henri Matisse
Not to be construed as professional advice.Originally Posted by Wino
Under virtually all (though not all) scenarios.
A Canadian citzen, living in Canada, winning lottos, large slot payouts, significant table games wins, or other types of gambling activity in Canada, is not required to report winnings as income. Wins, for the purposes of CCRA (Revenue Canada for the less informed) is regarded as a windfall- and not subject to taxation. I've googled this in the past, have read several articles, and find it extremely difficult to believe that my activities, under any scenario would be subject to tax reporting.
From time to time, As a casual part time gambler in the US, I have never reported US winnings on my Canadian tax return. I have not declared wins to the IRS. I am not required to. My activities are limited to table games, and for this purpose, I have never been issued any US tax slip. I do know Canadians with significant activity within the US. I don't believe these individuals are subject to Canadian taxation - however, given the depth of the activity, I would think it prudent they check their status with qualified accountants within the US, and with the IRS. I do believe they are subject to US taxation on US based wins.
Slots and lotteries are a different matter. Canadians are taxed at source (at the casino) for reportable wins, the same percentage as US citizens. Correct me if I'm wrong, I believe the amount is 35%. The twist for Canadians is they can elect to file a US tax return, and be refunded so that the Canadian citzen US tax rate is effectively reduced to 20%. For those travellers leaving MaCarran, there are plenty of wall signs of companies offering to prepare US tax returns for those Canadians (for a percentage) who have been taxed at source. Hope this helps.
Not to be construed as professional advice.
Under virtually all (though not all) scenarios.
A Canadian citzen, living in Canada, winning lottos, large slot payouts, significant table games wins, or other types of gambling activity in Canada, is not required to report winnings as income. Wins, for the purposes of CCRA (Revenue Canada for the less informed) is regarded as a windfall- and not subject to taxation. I've googled this in the past, have read several articles, and find it extremely difficult to believe that my activities, under any scenario would be subject to tax reporting.
From time to time, As a casual part time gambler in the US, I have never reported US winnings on my Canadian tax return. I have not declared wins to the IRS. I am not required to. My activities are limited to table games, and for this purpose, I have never been issued any US tax slip. I do know Canadians with significant activity within the US. I don't believe these individuals are subject to Canadian taxation - however, given the depth of the activity, I would think it prudent they check their status with qualified accountants within the US, and with the IRS. I do believe they are subject to US taxation on US based wins.
Slots and lotteries are a different matter. Canadians are taxed at source (at the casino) for reportable wins, the same percentage as US citizens. Correct me if I'm wrong, I believe the amount is 35%. The twist for Canadians is they can elect to file a US tax return, and be refunded so that the Canadian citzen US tax rate is effectively reduced to 20%. For those travellers leaving MaCarran, there are plenty of wall signs of companies offering to prepare US tax returns for those Canadians (for a percentage) who have been taxed at source. Hope this helps.
In general, foreigners winning Lottery and casino games will pay one time 50% tax at the sight. It is US tax law. If there is a treaty, you can file US tax return in the year end to get some money back. In your case, Canadian law doesn't apply at all. If you do not win more than $1200, the casino won't ask for your ID, you can pretend to be American and not pay tax assuming you did not use player's club card that can trace back to you.
Last edited by BJGenius007; 01-12-2016 at 07:53 AM.
From http://www.reviewjournal.com/busines.../taxlaws.html:
- Q * I'm a Canadian citizen who likes to make occasional trips to casinos in the U.S. Recently, I won $12,856 at keno. The casino withheld 30 percent of my winnings for U.S. income tax, and didn't allow for the fact that I was down $300 on the day and had the tickets to prove it. Someone at the casino told me that he thought the money was recoverable for Canadians once they returned to Canada. Is this true?
A * If this was in 1998 or later, you're in luck. As a result of recent changes in the tax treaty between the U.S. and Canada, Canadian citizens who won enough to have the witholding of tax on their winnings, may file a U.S. Non-Resident Tax Return on which they can deduct U.S. gambling losses from their reported U.S. winnings and potentially get a refund for the full amount withheld, if you have as much or more in losses than winnings. If your U.S. losses are less than your winnings, you will get a partial refund.
"I don't think outside the box; I think of what I can do with the box." - Henri Matisse
This comes up from time to time for Canadian tournament players. I found this a while back:
http://www.taxtips.ca/personaltax/usgamblingtaxes.htm
The key information is:"If you are a Canadian resident and have had 30% tax withheld from winnings from a contest, according to the Internal Revenue Service (IRS), you cannot recover this money.
If you are a Canadian resident and have had 30% tax withheld from lottery or gambling winnings in the US, some or all of the tax can be recovered if
you also have US gambling losses to offset some or all of the winnings, or
The interesting point is that blackjack, among other games, appears to be exempt. I have successfully argued this point on site with casino staff who wanted to withhold 30% from a recent tournament payout.
Last edited by Gronbog; 01-12-2016 at 08:23 AM.
Now more than ever, individuals and their families are moving back and forth between Canada and U.S. for personal and professional reasons. This creates complex cross-border investment management, tax, estate and financial planning challenges that require specialized expertise to manage.
Canada has a tax treaty with the states, which says that Canadians are taxed like Americans with regards to gambling winnings in the states. Gambling winnings for Americans are treated like any other income. So basically if you gamble in the states and win, you owe the IRS. But you can claim losses against wins. So if you lose $500 at blackjack and win 1k at poker you only owe for $500. Presumably the first 10k or w/e of gambling winnings are tax free (personal exemption) but I am not an accountant so you should consult with one.
Last edited by Meistro123; 04-29-2017 at 01:07 PM.
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