vpFREE2 Forums

Taxes for U.S. citizens/non-residents on jackpots?

#1

You may have lucked out - I did another search online and came up
with something this time from Casino City Times:

The withholding rate for nonresident aliens is 30%. Not
coincidentally, the tax rate for nonresident aliens is also 30%. So,
if a citizen of a foreign country wins $1 million cash at a slot
machine in Las Vegas, he will find he is only paid $700,000. The
remaining $300,000 is sent to the IRS. The foreign citizen is
unlikely to ever file an income tax return, but the IRS gets paid in
full anyway.

I am British and as far as I am aware we don't pay any tax on

winnings in

the US. I won a Royal at Treasure Island in April and received the

whole

amount after producing my British passport.

Is this a new rule?

From: larsonsm [mailto:larsonsm@y…]
Sent: 20 September 2004 19:18
To: vpFREE@yahoogroups.com
Subject: [vpFREE] Taxes for U.S. citizens/non-residents on jackpots?

Does anybody have any expertise in this area? I was fortunate

enough

to hit a royal at Caesar's last week on a $.50 machine. When the
attendant came to pay it, all I had for ID was my Bermuda drivers
license. I told her that I was a U.S. citizen and still paid U.S.
taxes, but she said that without a U.S. ID, I would have 30%

deducted

immediately for British taxes. That didn't make sense to me since
Bermuda does not operate under the UK tax structure despite being a
UK territory. But what I ended up doing was getting a "certificate
of win" and coming back later with my passport to get my US tax

form

and the full $2000.

So, lesson number 1 is keep the passport handy in case you win a
jackpot! But I am curious if anyone knows how they decide how much
to take out or what happens to that money. If I was living in
England, I would probably have a chance to recoup some of that 30%,
but since I don't file any sort of tax return in Bermuda, I think I
would have been throwing it away. Where would that money have

gone,

···

--- In vpFREE@yahoogroups.com, "jackie" <jackie.pearson1@b...> wrote:

-----Original Message-----
to the UK? It doesn't make sense to me...

Steve

vpFREE Links: http://members.cox.net/vpfree/Links.htm

Yahoo! Groups Links

#2

Actually, the Canadians that I've talked to who won big had their 30%
withheld; they then filed a return with the IRS and got all the money
back the next year. I know Canada has a tax treaty with the US that
makes all gambling winnings, in effect, tax free for Canadians visiting
the US. Perhaps the Casino was trying to help the client, but in my
opinion they were still breaking the rules, since anything that would
generate a W-2 is supposed to have the 30% withheld. Although Bermuda
being a tax haven might have something to do with it. Keeping your
passport handy IS good advice, though!!

"A Little Less Conversation, A Little More Action, Please"
Elvis Presley, 1968

···

-----Original Message-----
From: larsonsm [mailto:larso…@…com]
Sent: Monday, September 20, 2004 3:42 PM
To: vpFREE@yahoogroups.com
Subject: [vpFREE] Re: Taxes for U.S. citizens/non-residents on jackpots?

You may have lucked out - I did another search online and came up
with something this time from Casino City Times:

The withholding rate for nonresident aliens is 30%. Not
coincidentally, the tax rate for nonresident aliens is also 30%. So,
if a citizen of a foreign country wins $1 million cash at a slot
machine in Las Vegas, he will find he is only paid $700,000. The
remaining $300,000 is sent to the IRS. The foreign citizen is
unlikely to ever file an income tax return, but the IRS gets paid in
full anyway.

--- In vpFREE@yahoogroups.com, "jackie" <jackie.pearson1@b...> wrote:

I am British and as far as I am aware we don't pay any tax on

winnings in

the US. I won a Royal at Treasure Island in April and received the

whole

amount after producing my British passport.

Is this a new rule?

-----Original Message-----
From: larsonsm [mailto:larsonsm@y…]
Sent: 20 September 2004 19:18
To: vpFREE@yahoogroups.com
Subject: [vpFREE] Taxes for U.S. citizens/non-residents on jackpots?

Does anybody have any expertise in this area? I was fortunate

enough

to hit a royal at Caesar's last week on a $.50 machine. When the
attendant came to pay it, all I had for ID was my Bermuda drivers
license. I told her that I was a U.S. citizen and still paid U.S.
taxes, but she said that without a U.S. ID, I would have 30%

deducted

immediately for British taxes. That didn't make sense to me since
Bermuda does not operate under the UK tax structure despite being a
UK territory. But what I ended up doing was getting a "certificate
of win" and coming back later with my passport to get my US tax

form

and the full $2000.

So, lesson number 1 is keep the passport handy in case you win a
jackpot! But I am curious if anyone knows how they decide how much
to take out or what happens to that money. If I was living in
England, I would probably have a chance to recoup some of that 30%,
but since I don't file any sort of tax return in Bermuda, I think I
would have been throwing it away. Where would that money have

gone,

to the UK? It doesn't make sense to me...

Steve

vpFREE Links: http://members.cox.net/vpfree/Links.htm

Yahoo! Groups Links

vpFREE Links: http://members.cox.net/vpfree/Links.htm

Yahoo! Groups Links

#3

The withholding rate for nonresident aliens is 30%. Not
coincidentally, the tax rate for nonresident aliens is also 30%.

So,

if a citizen of a foreign country wins $1 million cash at a slot
machine in Las Vegas, he will find he is only paid $700,000. The
remaining $300,000 is sent to the IRS. The foreign citizen is
unlikely to ever file an income tax return, but the IRS gets paid

in

full anyway.

To be precise, it is income that is not "effectively connected with a
trade or business" which is taxed at the 30% rate.

I wonder how the poker players who are not U.S. citizens, who have
winnings in the U.S., are taxed...I would venture a guess that
palying poker (or gambling) would be considered their trade or
business and then they are taxed just as a U.S. citizen.

Don the Dentist