Playing in Canada, you can calmly withdraw your winning. And you will never expect somebody to ask you to share. But in the US gambling is taxable. It means that some amount of your reward will be taken away. Really, sounds not very good. However, it is too early to start suffering from bouts of depression. According to the part XXII of the Canada-US tax Treaty, it became possible to compensate some cash. So, there are some ways to get back the toll.
The IRS is an Internal Revenue Service, which deals with funds and duties.
Except the tax function, the company also demands a kind of a gaming report. It is a special diary where you have to carefully write down how many sessions you’ve made, the sum of the prizes and losses. The particular address of Canadian online casino also may be included.
Tax Rate for Canadian Gamblers
Generally, the IRS automatically withholds 30% of your winning. In the US gaming rewards over 1,200$ are considered as significant and go under taxes. It is all the same $10,000 or $50,000 or even $100,000. The amount is always 30%. So, bigger win charges bigger percentage.
On the whole, all the gambling is taxable. However, there are some pleasant exceptions. Such games as blackjack, roulette, Pai Gow, Baccarat, and Craps require no obligatory reports. In other words, you can play and do no records. Hence, unregistered winnings will not be charged. There is no official explanation of that deals, but, perhaps, the IRS does not consider these types of betting as big enough to tax.
Declaring Losses against Winnings
If you want to get back some of the withheld 30%, be prepared to do some exhausting paperwork. The evidence of your winnings has to be gathered.
They are the following:
- passport, it acknowledges your Canadian citizenship and identity;
- the 1040-S blank that given to you while withdrawing a prize in a particular date;
- the information about your wins and losses.
The second step is to obtain two forms: the W-7 and the 1040 NR. If you have never experienced this procedure before, then you also may acquire an Individual Taxpayer Number (ITIN). If you have no ID for some reasons or it is expired, you should provide such documents:
- national, voter’s registration and military identification cards;
- driving license;
- civil birth certificate;
- school records if you are a student under 25 years old;
- recognition from USCIS.
Finally, when you have applied all that papers, you may send them to the IRS. Generally, it takes about four or eight months to return the cash.
Online Casino Games with Refund
You can make a request to return some cash if you staked at:
- horse races;
- poker games;
- sports betting.
The refund related to these gambling activities can be partial or total. In order to take a full offset, your same-year losses have to be equal to the prizes. And if the total winning amount is higher, then you will get a partial compensation.
You cannot expect any offset if you played such games as craps, blackjack, roulette, dog races, Big-6 wheel and baccarat as, they are not taxable as we mentioned before.