Tax Info on U.S. Gambling for Canadians

[gronbog]

I found this online and thought it would be useful for other Canadians who have been fortunate enough to win an amount in the United States that requires withholding of taxes by the IRS.

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

tax was withheld from winnings from blackjack, baccarat, craps, roulette or big-6 wheel

If you won the money playing a tournament of one of the games listed in the second bullet, make sure that you get a 1042-S documenting the amount you won and how much was withheld.

You will also find information there about which forms to submit and how to apply for an Individual Tax Information Number (ITIN).

 

[gronbog]

A couple of more points to consider:

• In cases where you need to deduct losses against your gains, you can deduct tournament entry fees.
• There are services that will recover the money for you, however they charge a commission on the money recovered. These commissions can be quite high -- 25% or more. However, I used such a service the first time I found myself in this situation, and was able to negotiate a lower commission than what they originally wanted.