ITIN

[Rupert]

A horse I had made big cash in recent tourney and is moaning at me about having to have an ITIN.  I'm pretty sure I already have one from the WSOP last year - is there any way I can find out what it is?  Have had a google etc... Also am I right that I shouldn't have to pay any tax on his winnings?  He reckons he might have to withhold 6% as state tax or something.

Any help greatly appreciated

[Dewi_cool]

http://blondepoker.com/forum/index.php?topic=20599.0

[HOLDorFOLD]

Each state differs on it's percentage state tax. Mississippi has a 3% state tax. State tax is compulsory.

Federal tax is 30% which is payable on any winnings over $5k. To avoid paying this at the casino/hotel you will need an ITIN number.  This number can only be issued by a hotel/casino that has a special licence to do so (I forget the licence name, I have the paperwork somewhere and will update this bit).  Check with wherever you are playing to see if they have this licence because if they do not you will not be able to get an ITIN there and then (even from the IRS - you will only be able to 'apply' for an ITIN there and wait up to 6 weeks for it to be sent to your home address).

Where did he win?    If he won in Vegas he should be OK as most hotels have the licence and even if the particular hotel he is staying at doesn't he may be able to get one from one of the neighbouring hotels.

If it transpires that he cannot get an ITIN number then he can get his tax back once in the UK when he gets his number.  A lot more forms to fill out and it may take up to 6 months to actually get the tax back, but UK and USA have a tax treaty and it cannot be witheld indefinitely.

Another option the hotel/casino may be able to offer him is to have the whole winnings held on account there (again ask how long they will/can hold them) and he goes home and applies for his ITIN. When he has it he can contact hotel/casino and provide them with the number and they will release the whole amount (minus state tax) to him either by cheque or transfer (transfer may be chargeable - it all depends on the hotel/casino).

Again, ths may all vary from state to state but it certainly was the case in Mississippi.


As for should you pay him tax on his winnings, well he will def get that back at some stage, so theoretically you will not have to pay any tax on his winnings. Probably a case of you get your share of the money he comes home with (ie winnings minus state and federal tax) and later on when he gets his refund you will get your share of that amount.  That's if he cannot get an ITIN number whilst out there.

[Rupert]

Sorry didn't make it especially clear.  He's American and came 2nd in a tourney in St Louis.  So if state tax is compulsory, I suppose I just have to write off the 6% (or whatever it was, it was 7k out of 122k I think) which is a shame...

[jezza777]

yep but you get to wtite off future tournament buyins from the tax you have piad. (i think)