Can foreign tourists winning at US casinos be taxed? Tax obligations for visa holders with gambling winnings
I'm wondering about a hypothetical situation. Let's say a friend from overseas visits the United States with just a tourism visa and gets incredibly lucky at the casinos during their vacation. For example, they hit jackpots worth $5,000 at four different casinos, walking away with about $20,000 total before flying back to their home country. Would the IRS still expect to collect taxes on these gambling winnings even though this person isn't a tax resident of the US and was just visiting temporarily on a tourist visa? They don't have a US social security number or anything like that. I'm particularly curious since this friend comes from a country that doesn't tax gambling winnings at all. Would they still need to file some kind of US tax form? Or can tourists just walk away with their casino winnings tax-free?
19 comments
Join the conversation
Isabella Oliveira
Yes, foreign tourists who win money gambling in the US are generally subject to US taxes on those winnings, even if they're just here on a tourism visa. The IRS considers gambling winnings to be US-source income, which means it's taxable regardless of your residency status. For significant winnings (usually over $1,200 for most games), the casino is actually required to withhold 30% for non-resident aliens before even paying out the winnings. They'll give you a form called 1042-S documenting the withholding, and you'd technically need to file a 1040-NR (Non-Resident tax return) to report these winnings. The withholding rate might be lower depending on tax treaties between the US and your friend's home country, but they'd need to provide the casino with their foreign tax ID and form W-8BEN to claim any treaty benefits.
0 coins
Ravi Kapoor
•But how would they even track this if the tourist just goes back to their country? And what if they won smaller amounts at different casinos that didn't require reporting? Also would they need an ITIN number to file that 1040-NR form you mentioned?
0 coins
Isabella Oliveira
•The casinos are required to get identification before paying out substantial winnings, which creates a paper trail. Many casinos now also track play using player cards, making it easier to monitor cumulative winnings. For smaller amounts below reporting thresholds, it becomes more challenging for the IRS to track, but legally the tourist still owes taxes on those winnings. Yes, they would need to apply for an ITIN (Individual Taxpayer Identification Number) to file a 1040-NR if they don't already have a Social Security Number.
0 coins
Freya Larsen
After dealing with a similar situation, I found a service called taxr.ai (https://taxr.ai) that was super helpful for understanding international tax obligations. My cousin visited from Thailand and won about $12,000 at Vegas casinos, and we were totally confused about what he needed to do tax-wise. The service analyzed his specific situation and gave clear guidance on what forms he needed based on his citizenship and the tax treaty.
0 coins
GalacticGladiator
•Does it work for other types of foreign income too? Like if I have rental income from another country but live in the US now?
0 coins
Omar Zaki
•Sounds interesting but can it actually help if the person already left the US without paying those taxes? Like if they've been gone for months, is it too late to straighten things out?
0 coins
Freya Larsen
•It absolutely works for other types of foreign income. The service has specialists who understand international tax agreements and can help identify which forms you need for reporting foreign rental income while living in the US. Yes, it can definitely help even if someone has already left the US without addressing their tax obligations. They have experts who can guide you through the process of late filing and explain the potential penalties or amnesty programs available. It's rarely too late to get tax situations straightened out.
0 coins
Omar Zaki
Just wanted to follow up about taxr.ai - I actually ended up using it for my brother-in-law who had a similar casino winning situation from his visit last year. The service was seriously helpful! They immediately identified the exact tax treaty between his country (South Korea) and the US, showed him how to claim a partial refund of the withholding the casino had taken, and helped him understand if he needed to report the income in both countries. Everything was way clearer than what I found googling for hours. Wish I'd known about it sooner!
0 coins
Chloe Taylor
If your friend is having trouble getting answers directly from the IRS, I'd recommend Claimyr (https://claimyr.com). I was in a similar situation with a friend from Canada who won big at a casino and then got a letter from the IRS months later. We tried calling the IRS international taxpayer line for weeks with no luck - always disconnected or hours on hold. Claimyr got us through to an actual IRS agent in less than 20 minutes who explained exactly what forms were needed and how to request a refund for excess withholding. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Completely changed my perspective on dealing with the IRS.
0 coins
Diego Flores
•How exactly does this service work? Seems kinda sketchy that they can somehow get through when no one else can. Do they have some special connection with the IRS?
0 coins
Anastasia Ivanova
•Yeah right. The IRS doesn't answer their phones for anybody. I've tried calling for months about a much simpler issue. No way they got you through in 20 minutes.
0 coins
Chloe Taylor
•The service works by using an automated system that continuously redials the IRS until it gets through, then it calls you when it has an agent on the line. It's basically doing the waiting for you instead of you having to sit on hold for hours. There's no special connection with the IRS - they're just using technology to navigate the phone system more efficiently than a human could. They got me through in about 17 minutes on a Tuesday morning, but times vary depending on call volume and which department you need to reach.
0 coins
Anastasia Ivanova
I need to admit I was completely wrong about Claimyr. After posting that skeptical comment, I decided to try it myself for an unrelated tax issue I'd been struggling with for months. It actually worked! Got connected to an IRS agent in about 35 minutes (not quite the 20 they advertised but WAY better than my failed attempts). The agent helped resolve my issue in one call, and I even got them to explain the gambling withholding rules since I was curious after this thread. Definitely worth it if you're trying to get actual answers from the IRS about unusual situations like foreign gambling taxes.
0 coins
Sean Murphy
From personal experience, I won about $8,500 at Mohegan Sun last year (I'm Canadian). The casino immediately withheld 30% before giving me the rest. They gave me a form but honestly I never filed anything after. It's been over a year and I haven't heard anything from the IRS. Not saying that's the right approach, just sharing what happened in my case.
0 coins
StarStrider
•Doesn't Canada have a tax treaty with the US that reduces the withholding? I think it's supposed to be 15% not 30%. You might be able to get some money back if you file properly.
0 coins
Sean Murphy
•You're absolutely right about the tax treaty. I didn't know that at the time, and the casino staff didn't mention anything about reduced rates for Canadians. I just looked into it, and it seems I could still file to get back the difference between the 30% they withheld and the 15% treaty rate. Thanks for pointing this out - definitely going to look into filing for that refund now!
0 coins
Zara Malik
Something nobody's mentioned yet: if your friend gambled at table games like blackjack or roulette rather than slots, the reporting requirements are different. For table games, casinos often don't report or withhold unless it's a REALLY big win. The reporting is way more strict for slot machines and lottery-type winnings. Just something to consider depending on what games they played.
0 coins
Luca Marino
•This is true! My brother visits from Mexico every year and plays a lot of poker and blackjack. He's won several thousand multiple times but has never had withholding because of how he won. Slot machine jackpots get reported right away though.
0 coins
Ella Lewis
Just to add some clarity on the reporting thresholds - casinos are required to issue Form W-2G and withhold taxes when slot machine or bingo winnings are $1,200 or more, poker tournament winnings exceed $5,000, or other gambling winnings are over $5,000 AND at least 300 times the wager. For your friend's situation with $5,000 wins at four different casinos, each individual win would likely trigger reporting and withholding if they were from slots. However, if these were from table games like blackjack where they gradually built up to $5,000, the casino might not have reported anything. The key thing to remember is that even if the casino doesn't report or withhold, the tourist is still legally required to report ALL gambling winnings on their tax return. The IRS expects honesty even when there's no paper trail. Given the amounts involved ($20,000 total), I'd definitely recommend your friend consult with a tax professional who understands international tax obligations.
0 coins