ITIN for Gambling Winnings: Complete Guide

Nonresident aliens often receive gambling winnings from casinos, horse racing tracks, or sports betting in the United States. When certain gambling winnings exceed established thresholds, the IRS legally requires federal income taxes to be withheld. An Individual Taxpayer Identification Number, or ITIN, is necessary to report gambling winnings, comply with tax laws, and request refunds of taxes withheld.

The Internal Revenue Service (IRS) issues ITINs strictly for tax purposes to individuals who cannot obtain a Social Security Number. This number is required to file a tax return, report gambling income, and claim refunds or deductions. It also allows taxpayers to deduct gambling losses, document other taxable income, and comply with legally required tax forms. Without an ITIN, opportunities to claim exemptions under a tax treaty or credits may be lost.

The IRS requires casinos, racetracks, and other gambling establishments to report gambling winnings from slot machines, lotteries, bingo, keno, and similar games once winnings exceed specific thresholds. These payouts are generally considered income and may be fully taxable. Professional gamblers may be required to use Schedule C and itemized deductions to document gambling losses. With detailed records, receipts, and proper documentation, taxpayers can accurately determine which prizes are exempt, what must be reported, and how to pay taxes per IRS rules.

Understanding ITIN for Gambling Winnings

An Individual Taxpayer Identification Number is issued by the IRS solely for tax purposes, not for work authorization or immigration status. It allows nonresident aliens to file tax returns, report gambling winnings, and ensures withheld money can be refunded when treaties or deductions apply. The number resembles a Social Security Number but always begins with “9,” indicating it is used only for tax purposes, not employment.

Application: The number is requested on Form W-7. This tax form is filed either with a gaming official at the time of payout or with a federal income tax return at year-end.
Processing times: Standard processing usually takes seven weeks. During peak filing season, mid-January through April, processing may exceed eleven weeks. International applications often require additional time.

Who Needs an ITIN for Casino Winnings

Anyone who is not a U.S. citizen or permanent resident and who earns gambling income in the United States may need an ITIN. The IRS requires this number to track taxes withheld and process any refund claim.

Eligible Groups

Nonresident aliens: Visitors who receive significant winnings from slot machines, horse racing, keno, bingo, or lotteries are generally required to report gambling winnings with an ITIN. These winnings are considered income; the payer must issue a tax form documenting the amount.
Tourists and temporary visitors: International travelers who enjoy casino winnings or other prizes that exceed reporting thresholds must have an ITIN. Without it, they cannot file a tax return to recover overpaid taxes.
Students and exchange visitors: International students may occasionally participate in gambling activities such as sports betting or card games. If winnings exceed certain thresholds, the winnings are fully taxable and must be reported with an ITIN.
Professional gambler classification: A nonresident who qualifies as a professional gambler must treat gambling as a business. They may need to file Schedule C, report winnings as other taxable income, and deduct gambling losses. An ITIN is required to meet these obligations.

Who Does Not Need an ITIN

U.S. citizens and residents: Individuals with a Social Security Number are not required to obtain an ITIN to report gambling income. Their winnings and losses are reported using their existing number.
Exempt games: Certain gambling winnings do not require withholding. Certain games, including blackjack, roulette, craps, and baccarat, are exempt from withholding when the income is not connected with a U.S. trade or business. In these cases, the winner may not need an ITIN.

Understanding the 30% Federal Income Tax on Gambling Winnings

Federal tax rules explain why nonresident aliens often see large amounts withheld from their winnings. These laws are applied consistently across casinos, racetracks, and sports betting establishments.

Why Federal Income Tax Applies

IRS rules: The Internal Revenue Service treats gambling winnings as taxable income. Casinos and other payers must withhold 30 percent from nonresident aliens unless a tax treaty reduces the rate.
Legal requirement: The payer must report gambling winnings using the correct tax form. This ensures that the IRS has detailed records of the payout and the taxes withheld.

Withholding Triggers and Thresholds

Slot machines: When winnings exceed 1,200 dollars, taxes are withheld. The payer provides official documentation of the winnings and the amount of federal income tax withheld.
Poker tournaments: Winnings over 5,000 dollars are subject to withholding. The payer must issue a tax form and consider the entire amount fully taxable unless a treaty exemption applies.
Other games: Lotteries, horse racing, and keno are also subject to withholding when winnings exceed certain thresholds. These winnings are considered income and must be reported on a tax return.

Exempt Gambling Activities

1. Blackjack

Withholding Status: Exempt
Reason: IRS does not consider winnings fully taxable because of the built-in house edge.

2. Roulette

Withholding Status: Exempt
Reason: Classified as a game of chance with no consistent long-term gain.

3. Craps

Withholding Status: Exempt
Reason: Certain gambling winnings from craps are exempt from withholding at payout.

4. Baccarat

Withholding Status: Exempt
Reason: Not considered fully taxable at the time of payout.

5. Big-6 Wheel

Withholding Status: Exempt
Reason: Consistently categorized as an exempt gambling activity.

Importance of Tax Treaties

Reduced withholding: A tax treaty may allow winnings to be exempt or taxed at a lower rate. This is possible only when the individual provides an ITIN and files the required documentation.
Claiming refunds: Even if taxes are withheld at the time of payout, filing a tax return with an ITIN allows the taxpayer to claim any refund. This ensures that only the correct amount of income tax is ultimately paid.

How Tax Treaties Work

Purpose: A tax treaty is an agreement between two countries that defines how certain income is taxed. For gambling income, it may reduce or exempt the federal income tax that is otherwise withheld from casino winnings.
IRS enforcement: The Internal Revenue Service ensures that payers follow treaty provisions. Casinos and other payers must apply treaty rules when reporting winnings and losses.

Claiming Treaty Benefits

Eligibility: A taxpayer must be a resident of a country with an active tax treaty with the United States. Only then can they claim reduced withholding on certain gambling winnings.
Documentation: The payer requires an ITIN, a tax form, and proof of residency. Without these, taxes withheld cannot be reduced, even when a treaty exists.
Practical effect: Filing a tax return with an ITIN allows the individual to claim a refund for money withheld. Without this process, winnings remain fully taxable at the default 30 percent rate.

Step-by-Step Application Process

Applying for an ITIN can be done through a casino gaming official or by filing at the end of the year. Each option requires the correct tax form and supporting documents.

Step 1: Identify Application Method

The applicant must decide whether to apply through a Certified Acceptance Agent at a casino or wait until filing a tax return. Filing through a gaming official can allow taxes withheld to be reduced immediately, while filing later means waiting for a refund.

Step 2: Gather Required Documentation

Acceptable documents include a passport, national identification card, or birth certificate. These are needed to establish foreign status and identity for tax purposes. At least one document must contain a photograph that is current and valid.

Step 3: Complete Form W-7

Fill out Form W-7, selecting the correct reason for applying. For gambling income, the reason is usually that the applicant is required to report winnings and losses for federal income tax purposes. Accuracy is essential, as incomplete forms often result in rejection.

Step 4: Submit the Application Package

If a Certified Acceptance Agent is used, the application is submitted directly to the IRS. Suppose filing by mail, the application and supporting documentation must be sent to the ITIN Operation office in Austin, Texas. Processing times are generally seven weeks or longer during peak season.

Required Documentation and Tax Forms for Gambling Income

Proper documentation ensures that winnings and losses are reported accurately. The IRS provides a list of acceptable documents, and casinos must issue tax forms when payouts exceed certain thresholds.

Acceptable Documents

Passport: A valid passport is the only stand-alone document. It establishes foreign status and identity, making it the most effective option.
Other documents: Foreign voter registration cards, national identification cards, and foreign driver’s licenses may also be accepted. These documents must be current and clear and usually require additional proof, such as a birth certificate.
Return process: The IRS returns original documents within sixty days. Many applicants include a prepaid envelope to ensure faster delivery of these important documents.

Tax Forms Used

Form 1042-S: Casinos issue this form to report gambling winnings and taxes withheld. The payer and the IRS use it to track taxable income.
Form 1040-NR: Nonresident aliens must file this form to report gambling winnings and other income. It is required to claim a refund for federal income tax withheld.
Form W-7: This application is the only way to request an ITIN. It must be filed accurately, with detailed records and valid supporting documents.

Working with Certified Acceptance Agents for ITIN and Gambling Income

Many casinos have Certified Acceptance Agents who help visitors apply for an ITIN. These agents verify documentation and submit forms.

Role of Certified Acceptance Agents

Verification: CAAs are authorized by the IRS to verify passports and other documents. They issue a Certificate of Accuracy, eliminating the need to mail original documents to the IRS.
Assistance: CAAs guide how to complete Form W-7 correctly. This reduces the chance of rejection and ensures that taxes withheld can be refunded more quickly.

Benefits of Using an Agent

Convenience: Applicants keep their original documents while the agent submits verified copies. This is especially important for travelers who cannot risk losing a passport. Errors in Form W-7 are a common reason for rejection. CAAs help applicants avoid these mistakes and provide the correct supporting tax form.
Faster resolution: Working with an agent often reduces the time spent correcting rejections or resubmitting documents. This means refunds from gambling winnings are issued more efficiently.

ITIN Renewal Requirements for Winnings and Losses

An ITIN must remain valid to be used to report casino winnings or other taxable income. The IRS has specific rules on when a number expires and how to renew it.

When ITINs Expire

Non-use: If an ITIN is not used on a federal income tax return for three consecutive years, it expires on December 31 of the third year.
Impact: Filing a tax return with an expired ITIN may cause delays in processing. Refunds from gambling income may be reduced or withheld until the number is renewed.

Renewal Process

Form W-7: To renew, you must submit a new application, select the renewal option, and provide the existing number. As in the initial application, supporting documents are needed.
Documentation: Current identification is necessary. If the applicant’s name changes, they must provide additional proof, such as a marriage certificate or court order.
Timing: Renewal processing takes the same time as new applications, typically seven to eleven weeks. Filing early prevents delays in refunds for taxes withheld on casino winnings.

Common Rejection Reasons and Solutions for ITIN Applications

Even when the process is followed carefully, ITIN applications for gambling winnings may be rejected. The IRS provides clear notices explaining the problem; most rejections can be corrected.

Frequent Rejection Reasons

Incomplete form: Missing information or errors on Form W-7 often cause rejection. The IRS requires every line to be accurate because it is legally required for tax purposes.
Invalid documentation: Expired or unclear documents are not accepted. The IRS needs original documents or certified copies to establish foreign status and identity.
SSN eligibility: Some applicants are eligible for a Social Security Number, but apply for an ITIN instead. In such cases, the IRS rejects the application and instructs the applicant to obtain the proper number.
Missing tax return or exception proof: Applications that do not include a tax return or treaty exceptions are denied. The IRS considers the form incomplete without this supporting documentation.

Solutions

Correcting errors: The applicant must resubmit a complete and accurate Form W-7. This includes providing all required lines and signatures.
Providing valid documentation: Only current, legible documents are accepted. If originals are lost or unavailable, certified copies from issuing agencies must be used.
Using a Certified Acceptance Agent: Agents help avoid common mistakes by verifying documents and ensuring all required tax forms are attached.

Practical Examples

Real-life scenarios demonstrate how an ITIN affects gambling income, taxes withheld, and refunds.

Tourist Winnings

A tourist who wins money on slot machines often has 30 percent withheld immediately. With an ITIN, they can file a tax return, claim a refund under an applicable tax treaty, and recover part or all of the withheld taxes. Without an ITIN, the refund cannot be processed, and the withheld cash is lost.

Student Winnings

A nonresident student who wins in a poker tournament must file correctly to meet IRS rules. Because they are not eligible for a Social Security Number, they must obtain an ITIN. This allows them to report gambling winnings, file Form 1040-NR, and claim refunds for taxes withheld on their gambling income.

Business Traveler

A temporary visitor who wins at multiple casinos during a trip must consolidate the winnings for tax purposes. With an ITIN, all payouts are reported on one tax return, ensuring accurate gambling income reporting. This simplifies compliance and makes it possible to claim refunds when taxes withheld exceed the legally required amount.

Professional Gambler

An individual considered a professional gambler must treat gambling as business income. They report on Schedule C, record gambling activity, and deduct gambling losses as permitted by tax laws. When gambling winnings are considered fully taxable business income, an ITIN is required to meet IRS filing rules, claim deductions, and demonstrate compliance.

Unique Cases

Unusual circumstances sometimes arise in reporting gambling income. The IRS provides specific rules for each situation, and an ITIN is often required to resolve the issue.

Misapplied ITINs

In rare cases, an ITIN may be assigned incorrectly or linked to the wrong taxpayer. To correct this, the individual must provide proper documentation, submit a new Form W-7, and work directly with the IRS. This process ensures that gambling winnings and other taxable income are accurately reported under the correct taxpayer identity.

Dependents and Spouses

Each dependent or spouse must have a separate ITIN if included on a tax return for credits or deductions. A single ITIN cannot be shared between family members for reporting gambling income. Separate numbers ensure compliance with tax laws and allow each person’s winnings and losses to be reported correctly.

Military Personnel Overseas

Dependents of U.S. military personnel stationed overseas may face unique documentation challenges. In these cases, the IRS allows notarized copies of identification documents instead of originals. This exception makes it possible to maintain compliance and report gambling winnings, other income, and deductions even when stationed abroad.

Troubleshooting Checklist

A checklist ensures that an application is complete and includes all components before submission. It verifies that the required steps are completed, reducing the risk of missing important information or documents.

Form completion: Verify that the most recent Form W-7 is used, every line is filled, and the correct reason for applying is selected.
Supporting documents: Confirm that all required documents are current, legible, and properly certified. Passports remain the best single document for foreign status and identity.
Tax forms included: Attach the required tax form, such as Form 1040-NR or Form 1042-S, showing taxes withheld. These are legally required to prove that gambling winnings were reported.
Copies retained: Keep copies of all submitted documents, forms, and receipts. This protects the applicant if the IRS requests additional documentation.
Submission tracking: When mailing the application, use secure and trackable delivery. This ensures the IRS receives the package and reduces processing delays.

Next Steps

Once an ITIN has been issued, the taxpayer must file in the appropriate manner to pay taxes or claim refunds.

File tax return: A nonresident alien must file Form 1040-NR to report gambling winnings. This form also allows the taxpayer to claim refunds for taxes withheld that exceed the legally required amount.
Deduct gambling losses: Gambling losses may be deducted up to the amount of gambling winnings if itemized deduction rules are followed. Detailed records and receipts must be provided to support this claim.
Report other taxable income: Any other taxable income, such as business or investment, must also be reported. The IRS considers all sources of income when determining federal income tax.
Follow IRS rules: Tax laws require winners to record every gambling activity, including receipts, payer information, and details of wagers. Maintaining these records supports deductions and ensures compliance with federal requirements.

Frequently Asked Questions

How long does it take to get an ITIN for gambling winnings?

The IRS generally processes ITIN applications within seven weeks, though it may take up to eleven weeks during peak tax season between January and April. International applicants should expect longer processing times. An ITIN is legally required to report gambling winnings, file a federal income tax return, and request refunds for taxes withheld.

Can I file my tax return while waiting for my ITIN?

A tax return cannot be filed or processed until an ITIN has been assigned. The IRS requires the number to properly report gambling, casino winnings, and other taxable income. Once the ITIN is issued, you can file Form 1040-NR, claim refunds for taxes withheld, and deduct gambling losses under itemized deduction rules.

Do I need an ITIN if my casino winnings are under the reporting threshold?

If casino winnings do not exceed certain thresholds and no taxes are withheld, an ITIN may not be strictly required. However, obtaining one remains important if you file a tax return, deduct gambling losses, or claim a refund. Gambling winnings are generally considered taxable income, so accurate reporting and documentation are necessary.

Are gambling winnings from Native American casinos treated differently?

Gambling winnings from Native American casinos are subject to the same federal income tax requirements as other U.S. casinos. If taxes are withheld, the payer must issue the correct tax form. Nonresident aliens must have an ITIN to file a tax return, report gambling winnings, and claim refunds in compliance with IRS rules.

What happens if my ITIN expires before I file a return?

An expired ITIN will delay processing of your tax return and may cause refunds for taxes withheld on casino winnings or gambling income to be reduced or denied. To prevent this, you must renew by submitting Form W-7 with current documentation. Renewal ensures compliance with IRS tax laws and accurate reporting of winnings and losses.

Can my spouse use my ITIN to report gambling winnings?

Each taxpayer, including spouses or dependents, must obtain a separate ITIN for filing. A single number cannot be shared for reportable casino winnings, gambling losses, or other taxable income. If both spouses receive gambling winnings, each must report income individually and comply with IRS requirements to ensure accurate documentation, deductions, and claimable credits.