Recouping taxes paid on casino winnings as a non-resident

June 9, 2024 2:44 PM

Asking for my parents: Any info on recouping taxes paid as a Canadian on casino winnings in the US?

I live in the US, my parents live in Canada. They were visiting late last year, and won about $6k at the local casino. Is there any way for them to recoup that money?

This site explains that they must have gambling losses to offset some or all of the winnings. What does that mean exactly?

They do have a record of their winnings from the casino, but not sure what else they'll need. Is this even worth pursuing?

Thanks all!

posted by cozenedindigo to Work & Money (6 answers total)

It's been years (probably 10-15) but my mom has successfully gotten some money back from a ~ 10k US casino win - but it took a loooong time. To be honest, I think they were only successful once they brought in a professional who handled all the paperwork for them. If i remember correctly, the pros took a percentage of how much they were able to get back, but it also could have been a flat fee. I don't have any leads or recommendations, but it might be something to look into if you're interested.
posted by cgg at 3:08 PM on June 9

Gambling losses to offset the winnings means, like, yes, they won $6,000, but also (in 2023) they lost $X in US casinos. Basically they only owe taxes on the net amount that they won, so if they won $6,000 but lost $1,000 they only owe taxes on $5,000, not $6,000 and they could maybe get $300 refunded.

It may not be worth pursuing - do your parents have documentation for all the money they lost (i.e. spent on bets) in casinos? Was the amount that they lost a significant amount compared to what they won? If they answer to either of these is "no", it's probably more trouble than it's worth - i.e. if they can only prove that they lost $50, it's not worth it to fill out a US tax return and get an ITIN for 30% of $50.
posted by mskyle at 3:10 PM on June 9

I would add that if they were using some sort of loyalty card while gambling and were doing slot machines or the like the casino would have tracked their total win/loss, it's generally easily accessible online wherever they would check if they have earned comps.
posted by I paid money to offer this... insight? at 3:57 PM on June 9

As with all tax-related matters, it depends.

You might want to try the IRS interactive questionnaire about this topic.

You will likely need to consult with a CPA who has experience working with US income tax for nonresidents. The only way that I’m aware of to recoup the withholding tax is to file a US tax return.
posted by bkpiano at 7:23 PM on June 9 [1 favorite]

From the IRS's choose your own adventure form linked above, one outcome is this:

"To claim a refund of withholding tax, file Form 1040-NR, U.S. Nonresident Alien Income Tax Return and attach Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, or W-2G, Certain Gambling Winnings."
posted by zippy at 7:28 AM on June 10

Response by poster: Thanks all, this doesn't seem to be worth pursuing after all.
posted by cozenedindigo at 4:10 PM on June 21