In a previous post we shared some thoughts for Canadians on how to deal with jackpots in the U.S. But we received a recent inquiry with some novel twists around the question:
I am Canadian and heading down to Las Vegas. Up here we don’t get dinged for taxes on our wins. How does it work in Vegas? I’ve heard “Cash out by $500,” “Anything over $1000 is taxed,” and many more. Can you clarify this?
Terry
A jackpot is defined as a single win of $1,200 or more on an electronic machine (slots, video poker, electronic table games, etc.) on a single wager, regardless of the size of the wager.
Therefore, by definition, you never need to worry about how much money is in the machine when it comes to scenarios that get taxed. Casinos will have an upper limit of how much they’ll print a ticket out for before they’ll opt to pay out by hand instead, but that isn’t a taxable scenario, it’s just their rules for tickets.
So therefore the taxable scenario is very clearly defined. But Canadians aren’t except from tax implications, and in fact they will have taxes withheld upfront by default. We’ve shared previously at a high level what Canadians can do when this happens, including the potential (although not a guarantee) for being able to have those taxes refunded.
It is worth noting that all of the above speaks specifically to federal taxes. There are state-specific laws that also exist, and those can come into play for Canadian players as well. Fortunately, you’re referencing Las Vegas, where in Nevada there’s no income tax as of this writing, so it’s a straightforward scenario there.
Other states may differ, so if you ever plan on traveling somewhere else to gamble, it may not hurt to take a look at what the state-level laws are, and remember it only will come into play if you reach that magic jackpot number of $1,200 or more won on a single wager.
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