US Tax on Foreign Citizens’ Gambling Winnings

[Jackaroo]

On another forum, bjmace wrote:

My only worry is When i recently made final table at Venetian, I got charged 30% Tax On my winnings, which hopefully i will get back in about a year,

bjmace, you got hosed. According to information on the IRS website, gambling winnings of a “nonresident alien” at blackjack (and certain other table games) are specifically exempted from US tax .

See the article on this IRS web page, in particular the second and third paragraphs.

The applicable provision in the tax code is at Section 871, cited here. Scroll down to paragraph (j) Exemption for certain gambling winnings

And the provision exempting withholding on winnings is at Section 1441. Scroll down to paragraph (c)(11) Certain gambling winnings.

Note that the IRS article says a Form W-8BEN is not required to obtain the exemption from withholding, but you can submit (to the payer of the winnings) a Form W-8BEN solely for the purpose of identification as a foreign person, in which case a Taxpayer Identification Number (TIN) is NOT required.

The form is available for download on the IRS website: Form W-8BEN. It can be filled out in the Adobe pdf format prior to printing.

The Instructions for Form W-8BEN also point out the exemption. (upper right of first page)

Hope this information is useful to those in the “nonresident alien” category who are planning trips to the US for blackjack tournaments.

--jr

 

[BJFAN4]

Right on the money!

Excellent post, Jackaroo!
In order to expedite the filling in 2008 on winnings of 2007 which incurred a withholding, obtaining an ITIN now would be recommended. It would expedited the 2008 tax filling on the 2007 winnings.
Furthermore, it seems that US casinos respond more positively to requests not to withhold from non-residents if you can present an ITIN at the time of your win. So, any non-resident planning to play BJT's should obtain one and present it with a passport after winning.
It's incredible how US casinos who deal with a large contigent of non-resident customers are ill informed on the issue of withholding.

 

[BJFAN4]

More tax stuff for non-resident aliens.

ClubUBT has join the list of US gambling entities that are withholding 30% on Blackjack Tournament winnings by non-residents regardless of tax income code 28.
I have raised the issue with ClubUBT and to their credit, they are reviewing it.
Hopefully this can be resolved in favor of the players. Would be nice for once......