Croupier
Croupier
Joined: Nov 15, 2009
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April 27th, 2011 at 2:26:45 PM permalink
Does anyone know anything about the taxation of non US nationals in relation to gambling? I have tried to find info on the IRS site, but its all a little over my head. So if anyone knows anything and could put it into words I could understand, I would be grateful.

I plan on winning a lot of money in June, and dont want to lose 30% in tax straight away.
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thecesspit
thecesspit
Joined: Apr 19, 2010
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April 27th, 2011 at 2:51:07 PM permalink
Quote: Croupier

Does anyone know anything about the taxation of non US nationals in relation to gambling? I have tried to find info on the IRS site, but its all a little over my head. So if anyone knows anything and could put it into words I could understand, I would be grateful.

I plan on winning a lot of money in June, and dont want to lose 30% in tax straight away.



As I understand it... you are taxed on the winnings, but can then claim the tax back by filling in the right paperwork. The UK and US have a reciprocal tax arrangement. UK tax law does not tax gambling winnings.

Never had this happy occurrence happen to me, however, so someone may be able to answer better. The Hendon Mob website might have further info or be a place to tap up British poker players for info (as may the Gutshot website, if it's still going).
"Then you can admire the real gambler, who has neither eaten, slept, thought nor lived, he has so smarted under the scourge of his martingale, so suffered on the rack of his desire for a coup at trente-et-quarante" - Honore de Balzac, 1829
Ayecarumba
Ayecarumba
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April 27th, 2011 at 3:24:24 PM permalink
According to the IRS W2G Instructions:

Foreign Persons
Payments of gambling winnings to a nonresident alien individual or a foreign entity are not subject to reporting or withholding on Form W-2G. Generally, gambling winnings paid to a foreign person are subject to 30% withholding under sections 1441(a) and 1442(a) and are reportable on Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, and Form 1042-S, Foreign Personís U.S. Source Income Subject to Withholding. Winnings of a nonresident alien from blackjack, baccarat, craps, roulette, big-6 wheel, or a live dog or horse race in the United States parimutuel pool are not subject to withholding or reporting. See Pub. 515, Withholding of Tax on Nonresident Aliens and Foreign Entities.
Simplicity is the ultimate sophistication - Leonardo da Vinci
Croupier
Croupier
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April 27th, 2011 at 3:53:05 PM permalink
Thanks, now let me see if I am understanding the legalese.

If I win on a general table game, Its all mine. If I win a taxable amount on the slots or at poker, it goes on a different form to the standard W2-G, and 30% is kept back.

I suppose the important question is do I get to claim any of the witheld money back?
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kenarman
kenarman
Joined: Nov 22, 2009
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April 27th, 2011 at 4:56:59 PM permalink
Quote: Croupier

Thanks, now let me see if I am understanding the legalese.

If I win on a general table game, Its all mine. If I win a taxable amount on the slots or at poker, it goes on a different form to the standard W2-G, and 30% is kept back.

I suppose the important question is do I get to claim any of the witheld money back?



If the UK is the same as Canada you can get most (if not all) of it back by filing a US tax return at the end of the year.
Be careful when you follow the masses, the M is sometimes silent.
Ayecarumba
Ayecarumba
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April 27th, 2011 at 5:04:48 PM permalink
Actually, according to publication 515 on the IRS website, as a citizen of the U.K., the tax treaty specifically exempts you from being taxed on gambling winnings. They should not hold anything back, no matter the type of winnings. Be sure to have your passport with current visa stamp handy. The cage should have form W8-BEN for you to fill out and sign to verify your "non-resident alien" status, and citizenship in a tax treaty partner. You can apply for a Tax Id number in advance to save some trouble later. If you don't have a TIN, the cage may have to hold 30% of your jackpot until a Taxpayer ID number is generated by the IRS.

Boy, I hope you have this problem, as it means you would have hit a $1200 USD or greater jackpot. Good fortune to you!
Simplicity is the ultimate sophistication - Leonardo da Vinci
kenarman
kenarman
Joined: Nov 22, 2009
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April 27th, 2011 at 5:13:41 PM permalink
Quote: Ayecarumba

Actually, according to publication 515 on the IRS website, as a citizen of the U.K., the tax treaty specifically exempts you from being taxed on gambling winnings. They should not hold anything back, no matter the type of winnings. Be sure to have your passport with current visa stamp handy. The cage should have form W8-BEN for you to fill out and sign to verify your "non-resident alien" status, and citizenship in a tax treaty partner. You can apply for a Tax Id number in advance to save some trouble later. If you don't have a TIN, the cage may have to hold 30% of your jackpot until a Taxpayer ID number is generated by the IRS.

Boy, I hope you have this problem, as it means you would have hit a $1200 USD or greater jackpot. Good fortune to you!



I believe that Canadians and citizens of the UK are dealt with the same and as a Canadian I have personally paid the 30% several times upon winning. As my earlier post stated it is usually possible to get it back later depending upon what other tax US tax issues you might have but you only get 70% at the time.
Be careful when you follow the masses, the M is sometimes silent.
Croupier
Croupier
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April 27th, 2011 at 5:23:13 PM permalink
I am hoping I have this problem too. I am planning on playing poker, and money permitting entering a WSOP side event, so I am basically trying to cover my ass in advance.
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Ayecarumba
Ayecarumba
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April 27th, 2011 at 5:23:31 PM permalink
Quote: kenarman

Quote: Ayecarumba

Actually, according to publication 515 on the IRS website, as a citizen of the U.K., the tax treaty specifically exempts you from being taxed on gambling winnings. They should not hold anything back, no matter the type of winnings. Be sure to have your passport with current visa stamp handy. The cage should have form W8-BEN for you to fill out and sign to verify your "non-resident alien" status, and citizenship in a tax treaty partner. You can apply for a Tax Id number in advance to save some trouble later. If you don't have a TIN, the cage may have to hold 30% of your jackpot until a Taxpayer ID number is generated by the IRS.

Boy, I hope you have this problem, as it means you would have hit a $1200 USD or greater jackpot. Good fortune to you!



I believe that Canadians and citizens of the UK are dealt with the same and as a Canadian I have personally paid the 30% several times upon winning. As my earlier post stated it is usually possible to get it back later depending upon what other tax US tax issues you might have but you only get 70% at the time.



Actually, Canadians are not exempt from withholding, but here is the list from the IRS Publication 515:

Quote: IRS publication 515

Tax treaties. Gambling income of residents (as defined by treaty) of the following foreign countries is not taxable by the United States: Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, Russia, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Tunisia, Turkey, Ukraine, and the United Kingdom.

Gambling income of residents of Malta is taxed at 10%.

Claimants must give you a Form W-8BEN (with a TIN) to claim treaty benefits on gambling income that is not effectively connected with a U.S. trade or business. See U.S. Taxpayer Identification Numbers , later, for when you can accept a Form W-8BEN without a TIN.

Simplicity is the ultimate sophistication - Leonardo da Vinci
marksolberg
marksolberg
Joined: Nov 14, 2009
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April 28th, 2011 at 5:09:26 AM permalink
We live in a border city with Canada. Any taxable win for Canadians, whether slot or certain table game wins, are withheld at 30% on a form 1042S (Foreign Persons U.S. Source Income Subject to Withholding). We don't offer tax advice but all of our Canadian customers tell us they get it back by filing certain forms with their accountants.


Mark

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