A regular reader had some questions around taxes and big wins in the US, when coming from the UK:
I just read the one about taxable winnings which made me think about overseas visitors and what would happen with a big win?
Being from the U.K, I believe we are exempt from the $1200 limit (assuming correct paperwork is filled out) but say I won $100k on a slot, would I be then expected to pay any other taxes?
But more importantly, how would this get paid out, surely it can’t all be in cash – do casinos do bank transfers or cheques?
I just think it would be gutting to win a massive jackpot and then having to pay a higher unknown tier tax, or be left with the issue of being given physical cash when you’re only supposed to carry $10k over the border.
I’ve heard that jackpots in the $1m region are sometimes paid in annual instalments, but again, I wonder if that would be the same for international visitors.
Lots of questions here, which we’ll break down into sections. and of course here’s the required note that I am not an accountant, but I’ve reviewed a number of published accounts and guides of those who have been there, and this is what I’ve surfaced. Things can also evolve, so always consult an accountant if you ultimately hit the big one!
Taxes for a UK Player
When you’re not a US resident, your tax situation depends on a couple of items. By default, 30 percent will be withheld, but there are a number of countries where the US has a treaty in place which can be exempted from the taxes being withheld. This includes the UK.
The second piece is if you’re registered with the US Government and have an ITIN (Individual Taxpayer Identification Number). I’ve read differing accounts but it seems like some casinos will help you navigate this if you’ve never had a handpay before, while others won’t. With an ITIN and the right paperwork you can opt to not have any taxes withheld.
If taxes are withheld, you can request a refund of them, but it will take some time. But you are not ultimately obligated to pay taxes as a UK resident.
Check vs. Cash
Your preference will ultimately drive how you’re paid. When you reach handpay territory, you can usually request cash, check, some combination of both. You don’t have to worry about attempting to bring too much cash back into the country.
There may be other options for money payouts of big jackpots, but those two are pretty standard options, and I know of players who have availed themselves of various combinations at various times, depending on their preference.
One Payment vs. Installments
Usually whether a payout is done all at once or in installments depends on who is responsible for the jackpot. For jackpots that are banked by a single casino, even high limit Grands on games like Lightning Link and Dancing Drums, they’re banked and paid by the casino itself.
Casinos maintain reserves so they can pay out the big jackpots like these when required, and although regulations can vary, part of the reserves they carry can be influenced on the number and size of jackpots they have on the casino floor. This is so they can pay them out all at once when they’re hit.
On the other hand, most Wide-Area Progressives (WAP) are managed by the slot manufacturers, since the jackpots are maintained across multiple casinos to allow for larger jackpots. Most of them are paid in installments, although there may be exceptions.