Won at a U.S. Casino? How Canadians Get Back the 30% Withholding and Get an ITIN
Updated: 2 hours ago
When a Canadian hits a jackpot in the U.S., the casino usually keeps 30% for the IRS and hands over a Form 1042-S. Often that money isn't gone: under the Canada-U.S. tax treaty, Canadians can subtract U.S. gambling losses from the same year's winnings, and some table games aren't taxed at all.
Casino withholds: 30%, shown on Form 1042-S.
To get it back: 1040-NR + W-7 — return and ITIN filed together.
Deadline: 3 years after June 15 of the next year.
When you can get money back
1. U.S. losses in the same year
Article XXII of the treaty lets Canadian residents deduct U.S. gambling losses against U.S. gambling winnings of the same calendar year, as a U.S. resident could. Only the net is taxed.
2. Exempt table games
Winnings from blackjack, baccarat, craps, roulette and big-6 wheel aren't taxable for non-residents. Tax withheld on them can be refunded in full.
New for 2026: only 90% of losses count
Starting with the 2026 tax year, the One Big Beautiful Bill Act limits gambling loss deductions to 90% of losses, still capped at winnings. The treaty lets you deduct losses as a U.S. resident could, so the same limit applies. Breaking even can now leave a small taxable amount.
What doesn't qualify: losses outside the U.S., losses from another year, and contest or game show prizes, which non-residents can't deduct against.
Worked example
Sunita, a Surrey resident, wins a US$10,000 slot jackpot in Las Vegas. The casino withholds US$3,000. Her player's card statements show US$7,000 of U.S. slot losses that year.
Winnings — Won in 2025: US$10,000 · Won in 2026: US$10,000
Losses on record — 2025: US$7,000 · 2026: US$7,000
Losses deductible — 2025: US$7,000 · 2026: US$6,300 (90%)
Net winnings taxed — 2025: US$3,000 · 2026: US$3,700
U.S. tax at 30% — 2025: US$900 · 2026: US$1,110
Withheld by the casino — 2025: US$3,000 · 2026: US$3,000
Refund — 2025: US$2,100 · 2026: US$1,890
If her losses had equalled her winnings, the 2025 refund would have been the full US$3,000; for 2026, US$1,000 would still be taxed, leaving a US$2,700 refund.
Illustrative. The refund depends on your documented losses and how winnings are reported on Form 1042-S.
How to claim the refund
Collect documents. Form 1042-S from each casino (ask for a copy if lost), player's card win/loss statements for the year, and your own records.
Prepare Form 1040-NR. Report the winnings and deduct U.S. losses under the treaty, up to winnings (90% of losses from 2026). Attach the 1042-S forms.
Attach Form W-7. If you don't already have a U.S. tax number. The return and ITIN application go together.
Mail the package. To the IRS address in the W-7 instructions. It can't be e-filed with a new ITIN application.
Deadline: 3 years
Form 1040-NR is due June 15 of the following year, and a refund can be claimed for up to three years after that. For example, 2023 winnings can be claimed until June 15, 2027.
How long it takes
The ITIN is processed first, then the return; refunds often take several months. Without a U.S. bank account, the refund usually arrives as a U.S. Treasury cheque, which Canadian banks can deposit, sometimes with a hold.
Applying for an ITIN (Form W-7)
An ITIN is a U.S. tax number for people who can't get a Social Security number. You need one to file Form 1040-NR and receive the refund.
The right reason box: Check the box for a non-resident alien filing a U.S. federal tax return. The wrong reason is a common cause of rejection.
Identity documents: A valid Canadian passport is the best single document. The IRS needs the original or a copy certified by the issuing agency; a notarized copy isn't accepted. Without a passport, you need at least two documents, such as a birth certificate and a photo driver's licence.
Keep your passport (CAA): A Certifying Acceptance Agent checks your passport in person, returns it immediately, and sends your application with a certificate of accuracy.
Timing (7–11 weeks): About 7 weeks, and 9 to 11 weeks during tax season.
Expiry: An ITIN expires if not used on a U.S. return for three consecutive tax years. Win again after that, and you'll renew it with a new W-7.
The Canadian side
For recreational gamblers, casino and lottery winnings aren't taxable in Canada and aren't reported on your Canadian return. That also means no Canadian credit for the U.S. tax withheld: any U.S. tax you don't recover through Form 1040-NR is simply lost. Professional gamblers are treated differently.
Common mistakes
Assuming the 30% is final. Most Canadians with same-year U.S. losses can get some or all of it back.
Missing the three-year window. After that, the refund is gone for good.
No record of losses. Use your player's card on every visit; the IRS may disallow undocumented losses.
Counting losses that don't qualify. Only your own U.S. losses from the same year. Each spouse files their own return.
Mailing your passport. A Certifying Acceptance Agent can verify it so it stays with you.
Wrong box on Form W-7. A frequent reason for rejection, delaying the refund by months.
Talk to Icantax
We prepare Form 1040-NR gambling refund claims with the Form W-7 ITIN application, review your casino statements to claim every eligible loss, and track the claim until the refund arrives.
Call 604-496-2200 or email info@icantax.ca — Unit 110 - 13575 107A Avenue, Surrey, B.C.
General information, not tax advice for your situation.When a Canadian hits a jackpot in the U.S., the casino usually keeps 30% for the IRS and hands over a Form 1042-S. Often that money isn't gone: under the Canada-U.S. tax treaty, Canadians can subtract U.S. gambling losses from the same year's winnings, and some table games aren't taxed at all.
Casino withholds: 30%, shown on Form 1042-S.
To get it back: 1040-NR + W-7 — return and ITIN filed together.
Deadline: 3 years after June 15 of the next year.
When you can get money back
1. U.S. losses in the same year
Article XXII of the treaty lets Canadian residents deduct U.S. gambling losses against U.S. gambling winnings of the same calendar year, as a U.S. resident could. Only the net is taxed.
2. Exempt table games
Winnings from blackjack, baccarat, craps, roulette and big-6 wheel aren't taxable for non-residents. Tax withheld on them can be refunded in full.
New for 2026: only 90% of losses count
Starting with the 2026 tax year, the One Big Beautiful Bill Act limits gambling loss deductions to 90% of losses, still capped at winnings. The treaty lets you deduct losses as a U.S. resident could, so the same limit applies. Breaking even can now leave a small taxable amount.
What doesn't qualify: losses outside the U.S., losses from another year, and contest or game show prizes, which non-residents can't deduct against.
Worked example
Sunita, a Surrey resident, wins a US$10,000 slot jackpot in Las Vegas. The casino withholds US$3,000. Her player's card statements show US$7,000 of U.S. slot losses that year.
Winnings — Won in 2025: US$10,000 · Won in 2026: US$10,000
Losses on record — 2025: US$7,000 · 2026: US$7,000
Losses deductible — 2025: US$7,000 · 2026: US$6,300 (90%)
Net winnings taxed — 2025: US$3,000 · 2026: US$3,700
U.S. tax at 30% — 2025: US$900 · 2026: US$1,110
Withheld by the casino — 2025: US$3,000 · 2026: US$3,000
Refund — 2025: US$2,100 · 2026: US$1,890
If her losses had equalled her winnings, the 2025 refund would have been the full US$3,000; for 2026, US$1,000 would still be taxed, leaving a US$2,700 refund.
Illustrative. The refund depends on your documented losses and how winnings are reported on Form 1042-S.
How to claim the refund
Collect documents. Form 1042-S from each casino (ask for a copy if lost), player's card win/loss statements for the year, and your own records.
Prepare Form 1040-NR. Report the winnings and deduct U.S. losses under the treaty, up to winnings (90% of losses from 2026). Attach the 1042-S forms.
Attach Form W-7. If you don't already have a U.S. tax number. The return and ITIN application go together.
Mail the package. To the IRS address in the W-7 instructions. It can't be e-filed with a new ITIN application.
Deadline: 3 years
Form 1040-NR is due June 15 of the following year, and a refund can be claimed for up to three years after that. For example, 2023 winnings can be claimed until June 15, 2027.
How long it takes
The ITIN is processed first, then the return; refunds often take several months. Without a U.S. bank account, the refund usually arrives as a U.S. Treasury cheque, which Canadian banks can deposit, sometimes with a hold.
Applying for an ITIN (Form W-7)
An ITIN is a U.S. tax number for people who can't get a Social Security number. You need one to file Form 1040-NR and receive the refund.
The right reason box: Check the box for a non-resident alien filing a U.S. federal tax return. The wrong reason is a common cause of rejection.
Identity documents: A valid Canadian passport is the best single document. The IRS needs the original or a copy certified by the issuing agency; a notarized copy isn't accepted. Without a passport, you need at least two documents, such as a birth certificate and a photo driver's licence.
Keep your passport (CAA): A Certifying Acceptance Agent checks your passport in person, returns it immediately, and sends your application with a certificate of accuracy.
Timing (7–11 weeks): About 7 weeks, and 9 to 11 weeks during tax season.
Expiry: An ITIN expires if not used on a U.S. return for three consecutive tax years. Win again after that, and you'll renew it with a new W-7.
The Canadian side
For recreational gamblers, casino and lottery winnings aren't taxable in Canada and aren't reported on your Canadian return. That also means no Canadian credit for the U.S. tax withheld: any U.S. tax you don't recover through Form 1040-NR is simply lost. Professional gamblers are treated differently.
Common mistakes
Assuming the 30% is final. Most Canadians with same-year U.S. losses can get some or all of it back.
Missing the three-year window. After that, the refund is gone for good.
No record of losses. Use your player's card on every visit; the IRS may disallow undocumented losses.
Counting losses that don't qualify. Only your own U.S. losses from the same year. Each spouse files their own return.
Mailing your passport. A Certifying Acceptance Agent can verify it so it stays with you.
Wrong box on Form W-7. A frequent reason for rejection, delaying the refund by months.
Talk to Icantax
We prepare Form 1040-NR gambling refund claims with the Form W-7 ITIN application, review your casino statements to claim every eligible loss, and track the claim until the refund arrives.
Call 604-496-2200 or email info@icantax.ca — Unit 110 - 13575 107A Avenue, Surrey, B.C.
General information, not tax advice for your situation.
Comments