How to Claim Back Casino Winnings from Las Vegas as a UK Resident?

Landing a life-changing win in a Las Vegas casino as a UK resident is an exhilarating experience, but you might be caught off guard when the casino withholds a hefty 30% tax on your winnings. The good news is that, as a UK resident, you are eligible to reclaim some or all of these withheld taxes thanks to the tax treaty between the US and the UK. This article will guide you through the step-by-step process of claiming back those casino winnings, encompassing how to apply for an ITIN (Individual Taxpayer Identification Number), file the necessary tax forms, and furnish the required documentation.

Understanding US Tax Withholding on Casino Winnings

As a non-US resident, when you hit it big in a Las Vegas casino, the IRS mandates the casino to withhold 30% of your gross winnings. This applies to all gambling wins, whether it’s from slots, table games, poker tournaments, or even game shows. The casino will provide you with a Form 1042-S, detailing your winnings and the tax withheld, which is essential for reclaiming your withheld taxes.

Why Is There a Withholding Tax?

The IRS taxes all income earned within the US, encompassing gambling winnings from non-residents. Fortunately, the US-UK tax treaty allows UK residents to recover some or all of these taxes.

Steps to Claim Back Casino Winnings

Here’s how you, as a UK resident, can reclaim the taxes withheld from your Las Vegas casino winnings:

1. Obtain an ITIN (Individual Taxpayer Identification Number)

Before filing a US tax return as a non-resident, you’ll need an ITIN. This nine-digit number is for individuals who need to file a US tax return but aren’t eligible for a Social Security Number (SSN). Here’s how to apply:

• Complete Form W-7 (Application for IRS Individual Taxpayer Identification Number).
• Get your non-US passport verified by a CAA (Certified Acceptance Agent). The IRS only accepts original or certified copies of identification documents.
• Submit Form W-7 along with your federal tax return to the IRS.
• Include original or certified copies of documents proving your identity and foreign status, such as your passport, national identification card, or birth certificate.
• Mail the completed W-7 form and US individual tax return to the IRS.

The IRS typically takes 6-10 weeks to process the application and issue an ITIN.

2. File Form 1040-NR (Non-Resident Alien Income Tax Return)

Once you have your ITIN, file Form 1040-NR, which non-residents use to report US income, including gambling winnings, and claim back withheld tax.

• Attach Form 1042-S from the casino as proof of winnings and tax withheld.
• Claim exemption from US federal tax under Article 22 of the US-UK Tax Treaty on Form 1040-NR.

3. Submit Your Forms

Mail the completed Form 1040-NR, Form 1042-S, and supporting documents to the IRS address listed on their website.

4. Wait for Your Refund

The IRS usually takes 8 weeks to 6 months to process non-resident tax returns and issue refunds. Delays may occur if additional documentation is needed.

Important Tips for Claiming Back Casino Winnings

• Keep all documentation, including Form 1042-S and IRS correspondence.
• Simplify the process by using a CAA.
• Consult a US tax professional specializing in non-resident returns for complex situations or uncertainty.

Conclusion

Winning a significant amount at a Las Vegas casino can be a dream come true. Don’t let the initial 30% tax withholding dampen your spirits. As a UK resident, you have the right to reclaim a portion or all of those taxes. While the process may seem a bit complex, following the steps outlined in this article will help you navigate it smoothly and recover the funds you’re entitled to. Remember to gather all the necessary documentation, utilize the expertise of professionals when needed, and patiently await your refund.

FAQs