Do they W2G on cruise ships?

[rickhunter]

I've always wondered about this.  Since I've never even come close to hitting anything W2able, has anybody ever hit $1,200 or over on a cruise ship?

[reho33]

I think that since it is international waters , no.

[Brianzz]

Whether they give you one or not you're still supposed to report it........

Since cruise ships with casinos are all registered outside the United States -- with their casinos only open when the ships are in international (or at least non-U.S.) waters -- a frequent question is whether a slot jackpot or other big win on the high seas is subject to U.S. income taxes.

The short answer, for any U.S. citizen or permanent resident, is yes.  U.S. tax law provides that all American citizens and permanent residents are subject to income tax on money earned (or in this case won) anywhere on the face of the earth, and you are required to report it on the "Other Income" line when you fill out the old 1040.

But the next question often heard is whether cruise ship casinos (like all U.S. land-based casinos) file a W-2G tax form with the U.S. Internal Revenue Service in the event of a jackpot, and what level of payout triggers this.

The answer varies. Just like land-based casinos, the major cruise lines -- as we understand it -- are supposed to file a W-2G for all slot jackpots of $1,200 or more, and for any table game jackpots and payouts where the odds are 300 to 1 or higher (for instance, a Caribbean Stud progressive jackpot).

But in practice, some of the biggest cruise lines do -- and some don't.

On ship's that do issue W-2G's, the casino typically would get the needed information for the form before handing over the money, and give the lucky winner two copies while keeping one to transmit to the IRS. (By the way, if you win a shipboard bingo jackpot of more than $1,200, even though bingo is not part of the casino, you also may get a W-2G.)

As a general rule, cruise ship casinos do not withhold U.S. taxes on slot jackpots if the winner provides a valid social security number.  (If you decline to provide your social security number, the casinos may withhold at a rate of 28 percent.)

However, table game payouts subject to tax reporting or any gambling winnings in excess of $5,000 (and at least 300 times the amount wagered) are subject to withholding at a rate of 25 percent (or 28 percent if you decline to provide a valid social security number).

But the good news is that if you are playing high-stakes blackjack, craps, roulette, baccarat or pai-gow on your cruise, W-2Gs probably will not be forthcoming on any of the major cruise lines -- even if you have a great night at the table and win a pile of money.

Keep in mind, however, that cruise ship casinos are subject to U.S. money laundering rules, and the cruise line must file Currency Transaction Reports on aggregate cash transactions by any individual of $10,000 or more in any single day.

Also, if you return to the United States with $10,000 or more in cash in your possession, you need to declare this to U.S. Customs -- even if this has nothing to do with casino winnings, but is your retirement savings that you brought with you when you set sail. (Again, this is related to money laundering and the financing of terrorism.)

Finally, keep in mind that if you are lucky enough to hit a slot jackpot on your cruise, and somehow are not given a W-2G, you have no way of knowing whether the cruise line subsequently filed one for your winnings with the IRS. And, of course, when tax time comes, you still are responsible for declaring the jackpot as income.

[rickhunter]

The legality of paying is not what is in question, but rather the legality of an entity not considered  US territory to bind or withold taxes on behalf of a foreign government.  As a Finance guy I'm well aware that US taxes are global (that is no matter where it is earned, you are liable), I was just wondering if a non-us citizen wins, if they are automatically withheld funds like they are in US casinos.  In the US any money earned is taxable even if you are not a citizen.  This applies to everyone except members of congress in the Ways and Means Committee who "forget" to pay their taxes AND are subsequently not charged interest or penalties if they are busted.

[drunktek]

Oh well i must have forgotten to claim my $25k from the Atlantis 2 years ago from a tournament.

[Thor777]

Oh well i must have forgotten to claim my $25k from the Atlantis 2 years ago from a tournament.

  Uh.. I think YOU JUST DID !   

[drunktek]

im not worried

[StatFreak]

Oh well i must have forgotten to claim my $25k from the Atlantis 2 years ago from a tournament.

I remember that picture!   It's been a long time since I last saw it.
As I recall, we were joking with you about how many slot machines you would buy with the winnings.

[drunktek]

its been an even longer time since I got a check like that handed to me 

[Op-Bell]

You'll probably find it depends on whether the ship is US registered or not. Only US flagged shipping is subject to US regulations for what happens outside territorial waters. If your cruise ship is registered overseas, and nearly all of them are, I sincerely doubt if they would soil their hands dealing with the IRS. I had some dealings with Florida "cruise to nowhere" gambling ships registered, I believe, in Norway. The owners paid no tax (including personal income tax) to anyone, except the port fees and property tax on their shore-based offices. If you asked them about W2Gs they would think it was a huge joke, though they might oblige you with a withholding (which they would keep).