If you have been to the WSOP this year, you have probably noticed many changes from past years. There are two new venues, larger rooms and new tournament chips. However, unless you are a nonresident, then you may not have noticed one of the largest issues players face this year: the WSOP is not able to apply for Individual Taxpayer Identification Numbers (ITIN) at the payout cage. This may not seem like a big deal to most players (as there is no automatic withholding of tax for U.S. citizens or residents), but since the WSOP is not able to apply for ITINs, ALL nonresidents are subject to a mandatory 30% withholding of tax on net winnings.
When the WSOP was held at the Rio, they were able to facilitate ITIN applications for nonresidents who reside in tax treaty countries (see below for a complete list). However, since the Paris Hotel does not have this capability (yet, at least), all nonresidents, including those from tax treaty countries, will have 30% tax withheld from their net winnings.
What Are Your Options?
If you already have a valid ITIN, then you do not need to worry. Present your ITIN and proof of residency in a tax treaty country and no tax will be withheld. If you do not have an ITIN, then you have two options:
- Apply for an ITIN and return to the cage once it is assigned (either later in the year or during next year’s WSOP) to collect 100% of the payout. The WSOP will hold payouts at the cage for three years
- Collect 70% of your net payout, apply for an ITIN and file a U.S. tax return at the end of the year (refund takes 8-12+ months from time of filing)
Neither of these options are ideal, but if you reside in a tax treaty country, you will be refunded the tax that was withheld, it is just a matter of when you will receive it.
What Remained the Same?
Any nonresident residing in a non-tax treaty country will have 30% tax withheld no matter what. This means if you reside in any country other than those listed below, nothing has changed from last year and you are still subject to 30% withholding, even if you obtained an ITIN.
There is no perfect solution to this issue. As a certified acceptance agent, our firm is able to help nonresidents apply for an ITIN, but with the current IRS processing time, it will take at least 1-2 months to be assigned. Please feel free to contact us and we can discuss the process and determine the best course of action.
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