Each year, many thousands of Canadian gamblers pay millions in gambling winnings taxes, yet are often not aware that they are eligible to receive a casino tax rebate. Even if they know of their eligibility for a casino tax rebate, they are unsure of the procedures necessary for obtaining a rebate of gambling tax.
Gambling winnings taxes are imposed on certain US-based gambling wins over a set amount. The gambling winnings taxes is set at a rate of 30%, close to the top marginal rates of the IRS. For example, gambling winnings taxes are imposed on every slot machine win of at least $1200 US. If the slot machine win is $1500 US for example, the gambling winnings taxes would be $450 US, leaving the Canadian gambler with only $1050 US. The large sums paid to the gambling winnings taxes (both in terms of percentage and raw numbers) is an incentive for any Canadian gambler to pursue a rebate of gambling tax.
How Do I Know If I Have Paid Gambling Winnings Taxes?
If you have won a US casino jackpot, and have been issued IRS form 1042-S, it means you have paid gambling winnings tax, and have had 30% deducted from your original jackpot. A casino tax rebate is available to many Europeans and Japanese gamblers at the casino. They have to prove their national identity, usually in the form of an eligible foreign passport, and will receive an instant casino tax rebate at the casino. However, Canadian gamblers are not eligible for an instant casino tax rebate, and will have to apply for one later. It is more complicated, but the Canadian gamblers who do their homework will receive a gambling tax refund as well.
What Is A Gambling Tax Refund?
The Internal Revenue Service (IRS) tax code allows for the gambling winnings taxes to be offset by gambling losses. Thus, using the above example of a $1500 US slot machine win and its $450 US gambling winnings taxes; if the gambler had gambling losses of at least $1500 US, he/she would receive a gambling tax refund of $450 US, equal to the entire sum of the initial gambling winnings taxes. If the gambler had smaller gambling losses, he/she would receive a partial gambling tax refund.
Obtaining A Rebate Of Gambling Tax
Obtaining a gambling tax refund isn't easy. The IRS is infamous for its Byzantine rules, and this is made much worse for non-resident applicants. The IRS has however, licensed Certifying Acceptance Agents to help Canadian gamblers obtain a rebate of gambling tax. The Certifying Acceptance Agents are verified to have the requisite knowledge, professionalism, and objectivity to apply for, and receive the most timely, most thorough rebate of gambling tax for their Canadian clients. Without the use of Certifying Acceptance Agents, most Canadian gamblers would simply forego their US gambling winnings taxes, or would have to navigate the IRS tax code themselves, and then send in their original Canadian passports; all without any guarantee of ultimately obtaining a gambling tax refund.
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