As a tax preparer helping hundreds of Canadians to recover taxes withheld on their casino winnings in the United States every year, I’m often contacted in the heat of the moment, when the payoff has just been made. While my advice has long been to simply appreciate the moment and keep the form provided by the casino, the moment you cash in is also the one that can most influence your ability to recover the taxes paid once the year is over.
Indeed, the majority of the problems encountered during the processing of this type of refund claim by the US tax authorities are the discrepancy between the information provided to the IRS by the casino and the info that you provide later on your US tax report. Here are some tips that will avoid problems sometimes difficult to solve.
The first thing you should make sure of in the case of a casino-taxed win, if you are not a US resident, is to receive a 1042-S and not a W-2G form. In fact, any tax withheld on gambling must be reported on a 1042-S slip for a non-resident of the United States. However, casinos dealing mainly with local players, they sometimes have the reflex to use the form W-2G, exclusive to Americans. You are entitled to request the appropriate form.
The most common problem we observe is based on the name on this winning form. In fact, the casino will often ask for your driver’s license to complete this 1042-S slip. However, when it comes time to get your Individual Taxpayer Identification Number (ITIN), your passport will serve as official identification. Any discrepancy between the name or the way you enter this name between these two pieces of identification can create a variety of problems when processing your application. However, if you simply ask the casino to enter your name as it appears on your passport, they will agree without problem.
Another problem sometimes encountered is based on the box requesting the winner’s US Identification Number (normally box 13e of Form 1042-S, “Recipient’s U.S. TIN, if any”). If you already have an ITIN, that’s where the casino should enter it. Besides, if that’s your case, make sure they do! Having your ITIN number on your winning form will greatly facilitate the processing of your refund.
However, in the balance of evils, it is less serious to have this box left empty than to see a number that does not have its place. Some Canadian winners give their Canadian Social Insurance number. Big mistake! Since both Canadian and American numbers have nine digits, this number will automatically be considered a US Social Insurance Number by the IRS. The latter will not make the effort to correct the error, even if it is indicated to them. To correct it, it will be necessary for the casino to issue an amended 1042-S and then send it to the IRS correctly. However, many casinos are simply not open to making efforts of this sort. That’s why it’s always better to make sure the information is accurate at the very moment of winning.
The other elements are usually more secondary. It is nevertheless important to ensure that the amounts you have earned and paid in tax are reflected on the form. The code in box 1 should be the number 28, indicating a gambling win. Your address should also be valid and complete. Americans are not used to the Canadian residential address format. Beware of spelling errors, as much in your name as your address!
A well-completed and preserved 1042-S form will greatly increase your chances of getting your gambling tax refunds smoothly and within a reasonable time frame. Simple items to verify at the time of the win often become a nightmare to settle afterwards. Always be better prepared to win!
Did you have taxes withheld on gambling winnings between 2015 and 2019? If you did, we can offer a hassle-free solution to get your money back! Simply fill out this form so we can analyze your situation for free.