Lottery Winnings Tax – Gambling Taxation Questions And Answers

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you will only need to wait for your cheque.

Who’s eligible ?

Any Canadian citizen not residing in the USA having won a prize and seen the IRS withhold part of it can claim part or all of it to the IRS. Residents of other countries benefiting from a Tax Treaty with the USA can also be eligible.

What documents do I need?

Since January 2017, the IRS requires you to include a certified true copy of your passport (not just a notarized copy as before) in order to obtain an ITIN, (Individual Taxpayer Identification Number). You also need to join your 1042-S Forms, issued by the casino when you won. If you lost them, Tax Partners could retrieve them for you. With these, Tax Partners can build your file.

What’s the timeframe?

First, since you can file a Tax Refund (lottery winnings tax) only at the start of the next year, you have to wait till the next January to file. However, Tax Partners will complete your file ahead of time to make sure you get your money back as soon as possible.

If you already have an ITIN, the normal time required to get your refund will be between 8 to 16 weeks. If you don’t already have an ITIN, add 8 to 12 weeks more.

You have 3 years to file for a refund. For example, if you won in 2018, you have until April 15th 2022 to claim your refund. Obviously, the sooner you file the better it is.

How do I get paid?

Since your deduction was in US dollars, so will your refund. Contrary to some other companies, Tax Partners will never cash your cheque. Tax Partners will send you directly the original from the IRS. You will always get it quickly since Tax Partners do not benefit from withholding your payment.

What proof do I need?

If you’re a casual casino player, you have many tools. The most important one is the player’s card. It allows you to get a yearly statement  from the casino. You should also keep appropriate papers such as wire transfers, ATM receipts, debit/credit card receipts, ticket stubs, entry fee tickets, etc.

You must also keep a log of all your sessions, including:

  • Date of play
  • Casino name
  • Type of game and limits
  • If possible, names of people with you.
  • Wins or losses for your sessions.

A well-kept file will tremendously facilitate your claim.

Do I need to include all these proofs with my filing (Lottery Winnings Tax)?

Such supporting documents are of course relevant, but they will not be attached to your claim. Usually, your request for a refund is based uniquely on your word. However, it is important to understand that in the event of an audit by the IRS, even if these are rare, such documents could be asked for.

What games are exempt?

Certain games are exempt from taxation. These are blackjack, roulette, craps, Big-6 Wheel, and baccarat. Conversely, you cannot deduct losses from these games from your winnings in taxable games.

I won outside a casino; can you help me?

Of course! Any taxable gain, whether from a casino, racing, lottery, game show, charity night, etc. follows the same guidelines and Tax Partners can help you.