Gambling Tax in Canada
Canadians pay taxes on many goods and services; however, gambling income isn’t taxable for casual players. You can wager on sports, horses, online casinos, and gambling halls around the country. However, if you earn interest, there are taxes on gambling winnings, and you must declare that on your T5 tax form. Millions of Canadians play online casino games at licensed venues; however, not everyone knows where they stand taxwise on jackpot winnings and high payouts.
Play at These Canadian Casinos
Licensed & Verified
Professionally Reviewed
- $1600 Welcome Bonus
- Exceptional Promotions
- Loyalty Rewards
+ 200 Bonus spins
- Fast Payments
- Over 2500 Games
- amazing Promotions
+ 275 Bonus spins
- All the latest games
- MGA and UKGC licenses
- Daily bonuses
- Over 1,000 Games
- No Maximum Win
- No Wagering Requirements
+ 250 Bonus spins
- Progressive welcome offer
- Weekly cashbacks
- Daily extra spins
- Easy 1 minute registration
- Good payment methods
- Fast deposits & withdrawals
+ 150 Bonus spins
- Amazing VIP rewards
- Great live experience
- Special 'classic' section
+ 250 Bonus spins
- Play new games first
- Full reward scheme
- Expert's Area & Pro Tips
+ 11 Bonus spins
- Great live section
- The top providers in the industry
- Established, strong brand
+ 260 Bonus spins
- Great welcome package
- Exclusive VIP club
- Unlockable daily deals
+ 100 Bonus spins
- Instant Deposit
- Great range of jackpots
- Instant Withdrawal
- Fast Cashouts
- Large Selection of Games
- Free Spins Tuesdays
- High Roller Bonus
- Refer a Friend Bonuses
- Numerous payment methods
+ 100 Bonus spins
- Popular payment options
- Daily promotions calendar
- Around the clock customer support
+ 50 Bonus spins
- 3000+ games
- Friday reload bonus
- Tournaments
+ 220 Bonus spins
- Premium live casino games
- VIPs Real Money Rewards
- Over 2,000 games in the library
+ 200 Bonus spins
- Duel Against Other Players
- Live Chat Support
- Loyalty Program
+ 200 Bonus spins
- Unique Loyalty Program
- American Theme
- Great Bonus Offer
Are Gambling Winnings Taxable in Canada?
You might ask, are casino winnings taxable in Canada? The Canadian government doesn’t levy online gambling taxes on winnings since it isn’t a regular, consistent source of ordinary income. The government levies taxes on viable income sources like property rentals, employment, investments, etc. Gambling isn’t a viable source of income since most people don’t make a living out of it.
Are Professional Players Liable for Gambling Tax?
So is gambling income taxable in Canada for professional players? Such players make a living from gambling, so whether playing online or not, they make a living from it and are subsequently required to file taxes. Professional poker or blackjack players essentially operate freelance, and any income derived from gambling is taxable in Canada. Unfortunately, the Canadian Revenue Agency has been slow in assessing and audit individuals whose income source is gambling.
Pro Players are Taxable
Nevertheless, professional gamblers are taxable because they operate a business like anyone else, and profits are taxable. That business could also accumulate significant losses, thereby reduce its income. If the tax authorities start to tax professional players forcefully, it will damage the country. Nobody should avoid paying taxes; however, the information will help you understand the tax situation better.
Are Gambling Tax Laws the Same all over Canada?
Online gambling falls in a grey area, and the law doesn’t prohibit online betting via the Internet in Canada. Nevertheless, casinos operating legally in the region need a gambling license or be a local government operation. There are thousands of offshore casinos offering gambling services to Canadians.
Gambling has been prevalent in Canada since the 15th century. The State subsequently banned all forms of gambling outright in 1892; however, bingo, lotteries, raffles, and horse racing have been legal since the early 20th century. There are land casinos in several Canadian provinces and thousands of online casinos available as well. You aren’t liable to gambling tax if you play online or at a land casino.
Do I Have to Pay Gambling Tax in the USA?
Canadian citizens visiting Las Vegas and the other States are liable to a gambling tax of up to 30%. You should declare your winnings, and they can be deducted by the casino while cashing out your winnings. If you are a Canadian working in the USA legally, you can remove any losses you incurred and receive a casino winnings tax refund.
The USA permits Canadian tax residents to file for refunds for tax withheld in the US for gambling winnings. Therefore, any losses are tax-deductible for Canadian tax residents in the USA. To submit such a refund claim, one needs an Individual Taxpayer Identification Number and submit a Form 1040NR. It’s essentially a Nonresident Alien Income Tax Return for the year a Canadian resident received the winnings.
Tax On Gross Winnings in the U.S.
The gross winnings are subject to withholding tax and federal income tax. Canadian residents not engaged in the trade of gambling business in the USA should report winnings and losses on Schedule NEC of Form 1040NR. There are line items on the schedule for Canadian residents’ gambling winnings. Wins or losses are stated separately as line items for Canadian residents. While losses go under the losses line, the nonresident should note the net amount of gambling income.
Online Casinos for Canadians
Finding the best online casinos for Canadians isn’t straightforward. First, you’ll need to research the site and make a detailed evaluation of its services. There are prerequisites that you should look out for when choosing a casino. The following pointers will help you choose the best ones available for Canadians.
- Games & Slots Availability
- Functional Customer Support
- Beneficial Casino Bonuses
- Smooth User Experience & Effective Software
- Website Language
- Software for Mobile
- Withdrawal Times
- Deposit And Withdrawal Methods
- Gambling License
Gambling License
Legal gambling platforms operating in Canada need a gambling license to use and offer their services. Therefore, you should choose online casinos with a gambling license to avoid scams, unregistered operators, and rogue casinos. Providing the online casino has a valid license, you can complain about the site with the Canadian regulatory body, especially for transaction-related issues.
Round-Up on Gambling Taxes in Canada
Most Canadian citizens who gamble and play online casino games for money do so for recreational purposes; therefore, they won’t need to pay a tax. Online lottery or bingo hall winnings aren’t taxable in Canada, and casino games and sports betting. Full-time professionals who gamble as their primary income are liable to pay income tax.
If you are a Canadian citizen gambling in the USA, you have to declare your winnings; however, you can deduct your losses if you work there. When you win, keeping the essential related tax laws in mind will ensure you don’t get nasty surprises. Gambling laws regularly change, so keep updated with the latest regulations.
Canada Gambling Tax – FAQs
- Do Canadians pay tax on gambling winnings?
Canadians who gamble for pleasure aren’t required to pay a tax on their gambling winnings. That’s because the Canadian government doesn’t view such income as a consistent or viable source.
- Do Professional Players Pay Gambling Tax on their Winnings in Canada?
Professional gamblers whose primary source of income comes from gambling are liable to tax. However, professional poker players and regular gamblers are freelance workers, and they can also claim back their losses.
- Do Canadians Pay Taxes on Gambling Winnings in the USA?
If you win over $1,200 in a US casino, there’s a 30% tax on the excess. However, according to Article XXII of the Canadian USA Tax Treaty, Canadian citizens can claim gambling losses by filing income tax form 1040NR.
- Do Foreigners Pay Taxes on Gambling Winnings in Canada?
Foreigners visiting Canada’s casinos, buying lottery tickets, and sports betting aren’t liable to taxes on gambling winnings.
- How can I get a US Gambling Tax Refund?
You need to declare you aren’t a US citizen or hold a Green card to be eligible. In addition, you need to be a Canadian citizen and state that the winnings aren’t from a contest. Satisfy all three, and you qualify for the US Gambling Tax Refund.