World Series of Poker (WSOP) 2023 just kicked off at the Paris and Horseshoe casinos. From daring bluffs and impossible folds to record-breaking pots, the WSOP is a time of celebration and excitement for poker players around the world.
The Paris and Horseshoe casinos have filed an application to provide ITINs (Individual Taxpayer Identification Number), but it’s still pending with the IRS from last year’s WSOP. As a result of this, nonresident players who have applied through the casino in the past cannot do so.
U.S. citizens or residents are not subject to automatic tax withholding. Nonresidents, however, are in a bind. The government levies a mandatory 30% tax on nonresident winnings. You can only escape the tax if you live in a tax treaty country and have a valid ITIN.
What Can You Do?
If you arrived at the WSOP already equipped with an ITIN and proof of residency in a tax treaty country, don’t worry. You are exempt from the 30% rule and can collect your entire payout without any delay.
For those who do not have an ITIN, and you reside in a tax treaty country there are two options available: delay cashing out until you’ve obtained an ITIN and can return to the cage once you are issued a number allowing you to cash for your full winning. The second option is taking 70% of the money upfront and apply for an ITIN. Once the IRS issues your ITIN you can file a US tax return within three years. Anyone from a non-treaty tax country will still require an ITIN if they wish to recover some or all the 30% tax withheld. Regardless of country, applying for an ITIN sooner rather than later will expedite any refund claims.
Both methods are guaranteed to get your taxes returned successfully. The correct choice depends entirely on your personal circumstances. Here are a few questions to think about:
- Do you need cash immediately? Collecting 70% of the payout right now might be the better option.
- How soon will you be able to return to the cage? WSOP will hold payouts for three years, so there is some leeway.
- Are you confident you can file a U.S. tax return at the end of the year? Please know that once you submit all documents necessary for a tax refund, it may take 8-12+ months to receive your money.
It’s imperative that nonresidents understand their rights and responsibilities when playing in the WSOP. The payout tax structure isn’t ideal, but approach it with patience, and you will have no problems.
What If You Don’t Live in a Tax Treaty Country?
Unfortunately, the IRS does not recognize players from non-tax treaty countries as exempt from withholding. If you do not reside in a tax treaty country (listed below), you are subject to the 30% rule and will have taxes withheld from your winnings whether you have an ITIN or not.
Obtaining the payout you’re owed as a nonresident can be frustrating.
If you’re playing in a WSOP tournament and have yet to obtain an ITIN, let Kondler & Associates, CPAs assist you. As a certified acceptance agent, we’re authorized to assist nonresidents with their ITIN process. Stop by our booth across from the Paris registration room, and we can answer any questions.
We wish everyone good luck at WSOP 2023!
Tax Treaty Countries
Austria, Belgium, Bulgaria, Czech Republic, Denmark, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Netherlands, Russia, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Tunisia, Turkey, Ukraine, United Kingdom