Connect with us

Gambling

Canada’s betting winnings tax rules: key Facts to be known – The Yucatan Times

Published

on

Canada’s betting winnings tax rules: key Facts to be known – The Yucatan Times

While you might place bets for the thrill and the entertainment that comes with it all, every Canadian bettor hopes to win at the end of the game. And that might be why you are wondering whether gambling winnings are taxable in Canada. Be it the reason or not, it’s worth knowing the amount of money that will go to the Canada Revenue Authority (CRA) if you strike it big at the blackjack or roulette table.

Here is a look at your tax obligation if lady luck strikes your way according to Canada’s gambling taxation laws at federal and provincial levels.

How the Canadian Revenue Authority (CRA) taxes betting proceeds

Gambling winnings are practically tax-free in Canada since they are not considered as part of your regular income. The CRA only taxes individuals for money made from their property, employment, and other designated income sources. Fortunately, online betting winnings don’t fall under this category, although some operators charge transaction fees.

Who do you need to pay tax on your betting winnings in Canada?

As earlier mentioned, Canadian gamblers don’t need to pay tax on their winnings, but that’s just for casual bettors. Professional gamblers who compete in regional, national, and other major tournaments are required to pay taxes on their winnings as stipulated by the applicable federal or provincial regulations.

Do Canadians need to declare their betting winnings in their tax forms?

Since casual gamblers aren’t taxed in Canada, they don’t need to declare their betting winnings on their tax return forms. Whether you strike it big at sports betting, lottery, or horse racing, the Canadian Revenue Authority (CRA) won’t ask for any percentage. However, that might not be the case if you use your betting proceeds to invest since you will need to declare any additional income made from the investments.

For instance, if you browse Sporty Trader’s updated list of Canadian betting sites and win $100,000 at one of them, then invest the money in stock, you will owe the Canadian Revenue Authorities tax on the dividends and capital gain. But for a professional gambler, there is a tax on sports betting, horse racing, and other betting games. That’s because Canada considers professional gambling as a business, and any proceeds made must be reported and taxed as self-employed income.

Are your betting losses tax deductible for Canadians?

Since gambling winnings are tax-free for casual gamblers, betting losses aren’t tax deductible in Canada. That includes any losses you might make on lotteries, slots, sports betting, and any other games. However, professional gamblers can deduct their losses when filling out their tax forms since their winnings are taxable.

Simply put, betting losses are only deductible in Canada up to the amount of your previously declared winnings. That means your losses won’t be deductible if they happen in the first year of your gambling adventure. Fortunately, professional gamblers in the Great White North can deduct travel and competition entry fees expenses while reporting gambling proceeds earned from tournaments.

Continue Reading