Each year I help over 500 clients file their Canadian and US tax returns as well as plan for both their Canadian and US investment accounts. I also regularly help new US clients plan for their move to Canada.
I received a US tax slip for 2014 (1042-s) for income earned from Fanduel (Daily Fantasy Football website). It indicated income and also thousands in tax withheld. Do I need to report this income on my Canadian tax return and do I need to file a US tax return?
Hi Jeff,Great question. With daily fantasy sports sites like Fanduel blowing up, I’ve been getting this question more frequently over the past year or so.
Generally speaking, in Canada, this income will be treated one of two ways. If you are playing daily fantasy (DFS) as a business, the income would be taxable in Canada. You would report your gross income and expenses (such as entry fees, etc). If the income is considered gambling winnings, it would not be taxable in Canada.
As a Canadian with US winnings, you will receive either a 1099-misc or a 1042-s from Fanduel and may be subject to 30% tax withholding. Currently from a US tax reporting perspective this income will either be considered business income or “other income”, depending on whether you would be considered to be in the business of DFS or not. Either way, you can generally apply for a US tax ID number and file a non-resident tax return to recoup some or all of the withholding tax. There is no requirement to file a US tax return; however, in many instances this withholding tax can be refunded.
What if there are no losses.
I received a 1099-misc from Draftkings and they deducted 30%.
Do Canadians still pay the 30% and include it on schedule NEC.
Is there anyway not to include it in schedule NEC and file the 1040-NR without the NEC schedule
Is there any way to get the 30% or some of it back