US Gambling Return FAQ’s for Canadians

When Canadians win money at U.S. casinos or other gambling venues, U.S. tax is withheld automatically at 30%. Many people don’t realize they can file a U.S. non-resident tax return to recover some or all of that tax — particularly if they also had gambling losses during the year.

This guide answers the most common questions about U.S. gambling returns for Canadian residents: who can file, what counts as a loss, how to document it, and how the process works. It is written specifically for Canadian residents who are not U.S. citizens or green card holders.

If you are a U.S. citizen, green card holder, or have other U.S. source income, a gambling return is not the right filing for your situation — contact AET to discuss your specific obligations.

What is a gambling return? A gambling return is a casual term for a U.S. federal Form 1040NR — the non-resident alien income tax return — filed by a Canadian resident to recover U.S. taxes withheld from gambling winnings. It is filed when the filer has no other U.S. source income and is not a U.S. citizen or green card holder.

The U.S. treats all gambling winnings as taxable income. For non-U.S. persons, the payer withholds 30% of winnings at the time of payment. The Canada-U.S. Tax Treaty allows Canadian residents to reduce their taxable winnings by any gambling losses incurred during the same year — meaning if you lost money gambling in the U.S. as well as winning, you may owe tax on a smaller net amount and may be entitled to a refund of some or all of the tax withheld.

Who can file a gambling return? To be eligible to file a gambling return as a Canadian resident, you must be able to answer no to all of the following questions:

• Are you a U.S. citizen or green card holder?
• Have you ever applied to be a green card holder?
• Do you live in the United States?
• Do you have any other U.S. source income?

If you answered yes to any of these questions, you may have additional U.S. tax obligations beyond a simple gambling return. Contact AET to discuss your situation.

Is there any point in filing if I have no losses? Generally no. The purpose of filing the gambling return is to apply your losses against your winnings and recover the tax withheld on the net amount. If you have no gambling losses to deduct, your taxable winnings remain the same and the 30% tax already withheld is correct — there is no refund to recover by filing.

What counts as gambling winnings? Gambling winnings include money or prizes earned from casino games, slot machines, keno, poker tournaments, lotteries, sweepstakes, raffles, betting pools, game shows, horse or dog races, off-track betting, bingo, and online gambling activities based in the United States. All winnings from all U.S. sources for the entire year must be included on the return.

Are there games that are not taxed? Yes — winnings from blackjack, baccarat, craps, roulette, and Big 6 Wheel are not subject to U.S. withholding tax. Losses from these games also cannot be included in your deductible losses on the return.

What counts as a gambling loss? A gambling loss is money lost on games of chance or wagers on events with uncertain outcomes — including casino games, horse and dog races, lotteries, and other gambling activities that take place in the United States. Losses may be deducted from your winnings to reduce the income on which tax is owed. The amount deducted cannot exceed the total amount won.

Can I include Canadian gambling losses? No. Only gambling losses that occurred while you were physically in the United States can be included on your U.S. gambling return.

Can I combine losses from different U.S. venues? Yes. All U.S. gambling winnings from all sources must be reported, and all allowable U.S. gambling losses can be combined for the deduction — regardless of which casino or venue the losses occurred at.

How do I prove my losses? The IRS requires written records to support gambling losses. The best source is documentation from the gambling venue itself — if you have a frequent player card or player account, ask the venue what records they can provide. Many venues can generate statements showing your activity, which is worth requesting before you leave.

Specific records to keep by activity type:

Horse and dog racing: A record of each race including race name, date, time, bet details, and results. Keep payment records from the racetrack.

Lotteries: The lottery name, dates, unredeemed tickets, and details of each ticket including amount paid and result. Do not throw away losing tickets.

Slot machines: Record the slot machine number and keep a record of winnings and losses by date and time.

Poker and table games: Record the table number where you played and any casino credit card data indicating whether credit was issued in the pit or at the cashier’s cage.

If you don’t have records from the venue, keep a diary with the following information for each gambling session:

• Date the gambling took place
• Type of gambling activity
• Name and address of the location or event
• Names of other persons present with you
• Amount of money won and lost

Keep your records indefinitely. The IRS can request proof of losses even after a refund has been issued.

How do I know how much tax was withheld from my winnings? The gambling venue will provide you with either Form 1042-S (Foreign Person’s U.S. Source Income Subject to Withholding) or Form W-2G (Certain Gambling Winnings). These forms report the payer’s name, your name and address, the amount you won, and the amount of tax withheld. They may be provided at the time of winning or sent to you at the end of the year. Keep these forms carefully — they must be attached to your tax return.

Can I deduct travel expenses to get to the casino? No. Only gambling losses are deductible on a U.S. gambling return. Travel, accommodation, meals, and other expenses cannot be included.

When can I file a gambling return? A gambling return follows the same rules as a regular U.S. tax return — it is filed for the prior calendar year, once the tax forms for that year become available (usually late January or February). For example, your 2025 U.S. gambling winnings cannot be filed until 2026.

How far back can I go? You can file a gambling return for up to three years from the original due date of the return. For example, a return for 2022 winnings was originally due April 15, 2023 — meaning you have until April 15, 2026 to file and claim a refund. After that date, the refund is forfeited. If you have winnings from prior years that you have not yet filed, check with AET as soon as possible to confirm whether your window is still open.

Will I need to file a U.S. state return as well? It depends on the state where the winnings occurred. Generally, if no state taxes were withheld from your winnings, a state return is not required. State tax laws vary considerably, and your Tax Specialist will advise you on any state filing obligations at the time of preparation.

Can my return be filed electronically? Yes, provided you already have a valid ITIN. If you are applying for an ITIN at the same time as filing your return, the return must be mailed rather than e-filed, since the ITIN application must be reviewed and approved before the return can be processed electronically.

How long will it take to receive my refund? Processing times vary. For e-filed returns with an existing ITIN, refunds typically take two to three months from the date of filing. For mailed returns, allow additional time for postal transit and IRS processing. If your return includes a new ITIN application, add several additional weeks for the ITIN to be processed before the return is assessed.

You can check the status of your refund at irs.gov using the “Where’s My Refund?” tool. Information about your return is typically available six to eight weeks after e-filing or ten to twelve weeks after mailing.

How will I receive my refund? The IRS will issue your refund as a check in U.S. dollars. Direct deposit to a Canadian bank account is not available. If you have a U.S. bank account, you may have additional U.S. tax obligations beyond a gambling return — speak with a tax professional before requesting direct deposit.

What is an ITIN and do I need one? An ITIN — Individual Taxpayer Identification Number — is a unique number issued by the IRS to individuals who need to file a U.S. tax return but are not eligible for a Social Security Number. You cannot file a U.S. tax return without either an ITIN or an SSN. If you are a Canadian resident without a SSN, you need an ITIN to file your gambling return.

Note: your Canadian Social Insurance Number (SIN) is not an ITIN and cannot be used on a U.S. tax return.

How do I apply for an ITIN? An ITIN is obtained by filing Form W-7, Application for IRS Individual Taxpayer Identification Number, along with your tax return. ITINs are only issued when there is a filing need — you cannot apply for one in advance without an accompanying return.

Your Form W-7 application must include documents proving your identity and foreign status. Your passport is the only standalone document that satisfies both requirements. You have two options:

• Send your original passport to the IRS (the IRS will return it after processing — this method is not recommended due to the risk of loss or delay)
• Submit a certified copy of your passport obtained from the issuing agency

How do I get a certified copy of my Canadian passport? Certified copies of Canadian passports are available through Immigration, Refugees and Citizenship Canada. Visit canada.ca for current instructions and fees, as these are subject to change.

Do I need to apply for an ITIN every year? No. As long as your ITIN is used on a U.S. tax return at least once every five years, it remains valid. If your ITIN has expired due to inactivity, it will need to be renewed before filing.

Can I apply for an ITIN ahead of time so I have it ready? No — the IRS only issues ITINs when there is a current filing need, and the tax return must be included with the application as proof of that need. You cannot obtain an ITIN in advance of having a return to file.

Can AET prepare my gambling return? Yes. AET prepares U.S. gambling returns for Canadian residents, including Form 1040NR and the ITIN application (Form W-7) where needed. See the Canadian Tax Returns page for current pricing →

What do I need to provide to AET? To prepare your gambling return, AET will need:

1. A completed AET US 1040NR Non-Resident Gambling Questionnaire — be sure to include the amount of your gambling losses. You do not need to provide proof of losses to AET, but you must have the documentation available in case the IRS requests it.
2. Copies of all Forms 1042-S and/or W-2G you received from the gambling venue(s). Also inform your Tax Specialist of any winnings not reported on a slip — for example, a raffle prize.
3. Your ITIN if you already have one. If you have a Social Security Number rather than an ITIN, contact AET before proceeding — you may have additional U.S. tax obligations that require a different type of return.

What happens once the return is complete? If you already have a valid ITIN, your Form 1040NR can be e-filed. If your package includes a new ITIN application (Form W-7), the return must be mailed since it is not eligible for e-filing. AET will provide instructions for mailing and, though not required, we recommend using a tracked courier service.