Not sure whether you have to pay taxes on your online gambling winnings? You will need to answer the questions below, as this will determine which tax tips are best suited to you.
Are you a recreational player and a citizen of Canada?
A recreational player simply likes gambling in online casinos and does not use gambling as a way to make money.
Are you a professional / full time player and a citizen of Canada?
A professional or full time player could be determined as someone who likes to play regularly and their winnings classified as ‘business income’.
Once you have determined whether you are a recreational or professional player, it becomes slightly easier to understand what tax laws apply to you.
Please note, should you earn interest on your winnings, you must legally declare that on a T5 form. The interest you have earned is taxable.
Your Gambling Taxes Checklist:
- Canadians do not have to pay taxes on gambling winnings from horse racing, sports betting, lotteries, online casinos and any other games of chance.
- If you are a professional or full-time gambler, you are required to file taxes. But any losses from gambling, as well as any travel costs, can be deducted from your total “income” as a professional or full time gambler as they are regarded as business expenses. In many cases, gamblers won’t have to pay tax unless they employ the services of other people.
- If you gamble and win whilst in the USA, you need to declare it.
- Lottery winnings also aren’t taxable.
- The Canada Revenue Agency does not impose taxes on casino winnings, however gambling losses are not deductible.
Should you have any further questions about whether or not to claim taxes on your online gambling winnings, may we suggest that you do your own research or speak to a tax consultant.
As a side note, we are by no means legal experts, but rather gambling experts and the mere fact that the Laws in Canada change on a regular basis, especially when it comes to tax laws, we suggest you use this as a guide to do your own research or start discussions with your tax consultant for clarification.
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