US Gambling Return FAQs For Canadians

Gambling Return Tax AQs

You have made the trip from north of the border to the USA - be it for work, vacation, or anything else. You've struck lucky at a casino, but thanks to the archaic nature of the Red, White, and Blue's approach to gambling legislation, you are taxed 30% on any winnings. It's a tax that applies to all citizens in the USA.

Essentially - Uncle Sam is putting the burden of tax onto the individual and not the multi-billion dollar gambling behemoths. Winners must include any returns in their Internal Revenue Service (IRS) tax filing.

Fortunately, the Canadian government recognises that tax authorities should not punish players for striking lucky.

We have compiled a list of some of the most important FAQs about tax returns on gambling winnings for Canadians in the USA.

What is a Gambling Return?

The Gambling Return refers to the Federal US Tax form 1040NR, an avenue Canadian citizens can explore as part of the US and Canada tax treaty.

Essentially, it grants citizens the legal right to reduce their winnings by any losses they have incurred. That means any losses experienced by the player across any event can be deducted from the 30% tax on winnings.

It offers a route of additional value for the player to pursue and shifts the taxation responsibility away from the player and back on the government.

If you are a foreign citizen in the USA and you like a flutter, this article is for you.

What do you need to do to be eligible to claim?

There are several things you can do to ensure your 1040NR Gambling Return is as smooth and hassle-free as possible.

Here is a basic checklist to ensure your claim stays on track:

  • Keep records: When you submit your 1040NR Gambling Return, you will be asked to provide evidence of your losses. Be that a losing bet slip, lottery ticket, or bingo card. It all counts.
  • Dates and places: Include the date and location of each event or occasion on which you lost the money. The devil is in the detail as far as the IRS is concerned.
  • Include witnesses: Make sure any friends or family present can attest to your presence.

How long does it take to fill the 1040NR Gambling Return?

Oftentimes, it can take up to 60 minutes to complete the 1040NR Gambling Return, but a lot of it depends.

For example, if you are a fairweather bettor with a keen eye for detail and an understanding of the process, the form could be submitted in minutes.

However, if you like to flutter frequently, then the complexity of your gambling income and expenses could increase the length of time.

The most crucial facet of filing the form is accuracy, so make sure any information is correct. Take your time.

When filed, how long can it take for you to receive your money?

Gambling Return Time

There is no strict timeframe for the process, but estimates range from 2-3 months to up to six months.

A new process implemented recently has elongated the waiting period. Ensure you stay on top of your correspondence - a missed email, letter, or phone call could delay your application and subsequent repayment by weeks or months.

The date you file the return can also have an impact - the closer to the April tax deadline, the busier the IRS will be.

What are the 1040NR Gambling Return form deadlines?

The deadline for filing the 1040NR Gambling Return form is generally the same as the deadline for filing your federal income tax return- April 15 of each year. However, if this date falls on a weekend or holiday, the deadline may be extended to the next business day.

There are other deadlines to consider, too, though.

For example, gambling losses from the last three years can be set against winnings. Before submitting your final documents - go over the bank statements and comb through them to find a forgotten flutter. For instance, winnings from 2016 may be filed until April 15, 2020.

Winnings from 2017 must be filed by April 15, 2021 and on it goes.

Are there winnings from games that are not eligible for the I040NR Gambling Return form?

The gambling tax does not apply to winnings on the following games: Blackjack, Baccarat, Craps, Roulette, or Big 6 Wheel.

That's because the US government does not apply the tax to returns on any of the above games. Let's face facts - it would be difficult for an IRS employee to stand at a table with a calculator and cost all of the money that changes hands.

There are also no bet slips or wager slips on the live casino table, so it would be nigh-on impossible to prove losses.

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Dmitry Rogalchuk
With over 5 years of experience in iGaming, Dmitry Rogalchuk leads a content team at CasinoCanada, ensuring that every article on the CasinoCanada website is informative and engaging for our readers.
Head of Content
The University of British Columbia
The University of British Columbia & McGill University degrees, strategic marketing & content leadership expertise, sales strategies development
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