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Canadian friends won a $1700 hit on a slot machine in California. They would be considered a non-resident alien. The casino was required to withhold 30%. Their total losses unfortunately exceeded winnings. I can't find definitive answers online but here is what I have found so far. They would have to wait until next year (2023), file a W-7 to get a ITIN, file a 1040-NR and a Schedule 1 for the 1040-NR. They would also have to complete a Schedule NEC for the 1040-NR to calculate the tax. This is already 4 forms so I stopped researching. Does anyone know the step by step? I know there are companies in Canada that will do it for them but for a large fee. Does TurboTax do this? Fee? It just seems alot to go through but the tax withheld was $500+. Thank you for any help!!
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Under Tax Treaty provisions, Canadians are eligible to file US income tax Form 1040NR and claim their U.S.-source gambling losses from their U.S.-source gambling winnings, and recover casino taxes withheld at source and receive a refund. Total losses deducted cannot be more than total winnings.
Turbotax does not support Form 1040NR. SprinTax can be used to file Form 1040NR https://Sprintax
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