Casino Tax Refund for International Visitors to the USA

A tax treaty may exempt some payments from withholding tax. However, a 30% withholding federal income tax on payments such as casino gambling winnings is mandatory for non-residents of the US, owing to the negotiations that gave rise to special provisions for casino winners on casino taxes. Using Form 8233, you can avoid paying these taxes. The form enables you to claim an exemption on the 30% withholding tax. Although for any given calendar year, meeting the ‘substantial presence’ or the ‘green card’ test enables you to qualify as a US resident, certain rules are still necessary for purposes of tax. An individual is a non-resident alien if he/she is a resident of American Samoa, the Virgin Islands, Guam, Puerto Rico, or any other treaty country. Consequently, any person who does not meet the aforementioned test is a non-resident alien.

Under special circumstances such as the filing of a joint income tax return, a non-resident alien married to a citizen of the US may be considered a resident alien. However, for purposes of withholding tax, such individuals are still considered nonresident aliens. In such cases, it is advisable for him/her to check publication 519, US Tax Guide for Aliens. This is because it provides more information on the necessary tests that he/she requires to determine residency since without it he/she is considered as a non-resident alien in as far as withholding tax on his/her income is concerned.



Section 1441 of the IRS regulations covers the tax treaty benefit, and is the only one that allows for exemption from withholding tax. Further information on the determination of residence is available on line 4 on page 3 of the section. The tax treaty gives the terms of residency that are used to qualify residents, who are eligible to claim under the treaty.

However, he/she has the ability to claim additional withholding allowances for his/her spouse and children if he/she is a Canadian resident, or a resident of South Korea or Mexico, and an India or US student. In such as case he/she does not require Form W-8BEN, which is necessary for claiming an exemption on the withholding tax on his/her income, unless he/she is claiming a treaty benefit.

A withholding agent can control, receive, or keep in custody an amount that is subject to withholding, and has the ability to make payments or disburse this amount. An agent may be an individual, partnership, corporation, association, trust, or other legal entity. If the payment were income, then it helps to determine beneficial ownership in cases where the amounts that are paid are not considered as income. Consequently, a person that receives the income as an agent, nominee, or custodian is not considered a beneficial owner of income.

It is important for people to avoid errors in order to hasten the acceptance of their Form 8233. They should:

• Answer all the applicable questions
• Enter their identifying numbers in part 1 as well as their complete names and address
• Ensure that the space above Part 1 specifies the tax year for which their form applies
• Ensure that certification part 111 is complete
• Avoid claiming tax treaty benefits if you are ineligible
• Avoid claiming non-existent tax treaty benefits
• Use line 15 to claim the proper number of personal exemptions
• Make it easy for the IRS to identify the tax treaty benefit being claimed by completing lines 11 and 14 sufficiently.