Why are lottery winnings not taxed in Canada?

Lottery winnings aren’t taxable in Canada because the country views them as "windfalls" as opposed to income generated. They look at a lottery win just like an inheritance or gift money, and just like gifts and inheritances and other unexpected payments, it isn't subject to taxation.

Do you get the full amount when you win the lottery in Canada?

Yes, you will get the full amount of money that you’ve won while playing the lottery when you hit the jackpot in Canada. You’ll only have to devote a portion of your lottery winnings to tax obligations if you’re a pro gambler or if you’ve used lottery winnings to earn interest or profits from investments.

Do you have to declare lottery winnings in Canada?

No, Canadians don’t have to declare lottery winnings in Canada when doing taxes unless you work as a pro gambler or have earned interest by keeping lottery winnings in an interest-bearing savings account. You might also need to declare them if you use lottery winnings to buy stocks.

Do Canadian lottery winners have to go public?

Yes, those who win the lottery in Canada usually have to go public when they turn in winning tickets. The rush of excitement surrounding their win is great publicity for Lotto Max or 649 drawings. People can only remain anonymous in rare instances in which revealing their identities would put them in harm's way.

Can a tourist win the lottery in Canada?

Yes, a tourist can win the lottery in Canada and they won't have lottery winnings taxed in Canada. But unlike when a Canadian wins the lottery, tourists need to check on the tax laws in their respective countries to ensure they pay the proper taxes on lottery winnings.

How long do you have to claim lottery winnings in Canada?

You have about a year to claim your prize when you win the lottery in Canada in most cases. Check the expiration dates on lottery tickets to make sure you claim winnings before they expire on you. It is rare for someone to hold onto a winning lottery ticket for more than a year.

Are lottery earnings taxable in Canada?

Q: Is gambling taxed in Canada?

No, gambling isn’t taxed in Canada. The only exceptions to this will be if you’re considered a professional gambler or if you use gambling winnings to earn income on interest or investments. In these cases, you may be taxed on gambling winnings in Canada after you're paid interest or sell the investments.

Author: Dmitry Rogalchuk

Updated:06.01.2025

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In 2024, Canada will commemorate the 50th year of its inaugural national lottery event, famously known as the Olympic lottery.took place in 1974 , which contributed over $230 million for hosting the Montreal Olympics. It featured an impressive $1 million jackpot that was tax-exempt—setting a record for the largest lottery prize at that time.

Currently, Canada offers various lottery options to its citizens, and generally, winners do not have to pay taxes on their gains, similar to the tax treatment of earnings from casino games and sports betting. Read on to discover the specific conditions under which lottery winnings might be taxed in Canada.

What to expect if you win the lottery

Back in 1974, Canada had just one national lottery. Fast forward to 2025, and there are now three national lotteries available, including Lotto 6/49, Lotto Max, and Daily Grand lotteries.

If you find yourself fortunate enough to win one of these lotteries, knowing the next steps is crucial - start by signing your ticket to establish ownership, and prepare to claim your winnings before they expire.1 in 33,294,800 Typically, lottery winnings are disbursed within five business days. The way you decide to utilize this money—whether through spending, saving, or investing—may influence its tax implications in Canada.

What is the tax rate on lottery winnings in Canada?

If you strike it rich in the U.S. lottery, you may soon realize that a large portion of your winnings will be lost to substantial taxes. The Internal Revenue Service (IRS) often requires you to pay federal taxes, along with an additional 12% to cover state taxes.

However, in Canada, the situation is quite different; you25% of your lottery prize taken will not be taxed on your lottery winnings as long as your participation is for enjoyment rather than as a professional endeavor. Only rare circumstances involve taxation on lottery prizes here. Let's explore some instances where lottery earnings might incur taxes.

Approximately two-thirds of Canadian adultswon't have to set aside money acknowledge that they engaged in gambling over the past year. The majority of these individuals partake in gambling recreationally and won’t face taxes on their lottery wins or victories from online betting.

Professional gambler winnings tax

Nonetheless, there are some professional gamblers among the population, and these individuals are liable to pay taxes on any prize money from lotteries or additional windfalls. A professional gambler is someone who earns their livelihood through taxable gambling income. In Canada, these professional bettors are often taxed at rates ranging from 15% to 33%. If you find yourself in this category, consider exploring ways to deduct expenses to lower the taxes owed to the Canada Revenue Agency (CRA). Consulting with a financial advisor about potential tax deductions is crucial.

Tax implications related to income earned from lottery prizes

Once you win the lottery in Canada, it’s tempting to stash your newfound wealth in a savings account for safekeeping. Although this is generally a sensible approach, be aware that you might incur taxes if your savings account accrues interest.

You might also face tax liabilities if you start investing your lottery prize money in stocks or mutual funds and generate profits through capital gains. Additionally, there could be significant taxes on your lottery winnings if you establish a business that earns income and deduct expenses.

The tax consequences regarding interest from lottery winnings or capital gains derived from investments will vary based on the province you reside in.

If you are subject to taxes on lottery winnings or income from betting on sports or playing games at

, the tax amount will differ according to your province. Take a look at this helpful chart that outlines anticipated tax liabilities for professional gamblers and those who invest their lottery winnings for dividends from corporations.

Tax laws by province

Tax law comparison table by province online casinos in Canada For earnings up to C$142,292, the tax rate is 10%. In Calgary and various locations in Alberta, the maximum tax rate is 15% for income above C$341,502.

Starting from C$45,654, the tax begins at 5.06% and escalates to 20.5% for winnings surpassing C$240,716.
Province	Tax
Alberta	For income up to C$36,842, the tax is 10.8%, increasing to 17.4% for amounts exceeding C$79,625.
British Columbia	The tax rate is 9.4% for the first C$47,715, whereas it's 19.5% for amounts beyond C$176,756.
Manitoba	The tax is 8.7% on the initial C$41,457, increasing to 21.8% for sums above C$1,059,000.
New Brunswick	For incomes up to C$29,590, the tax is 8.79%, whereas those earning over C$150,000 are taxed at 21%.
Newfoundland and Labrador	Tax rates range from 5.05% to 13.16%, depending on the income bracket.
Nova Scotia	For the first C$31,984, the tax rate is 9.8%, and for incomes exceeding $63,969, it rises to 16.7%.
Ontario	The tax rate is 10.50% for earnings up to C$49,720 and 14.5% for incomes above C$142,058.
Prince Edward Island	Since 1974, there have been numerous remarkable lottery wins in Canada. Now that we’ve discussed the circumstances that make lottery winnings taxable in Canada, let’s highlight five of the most significant victories in the history of Canadian lotteries.
Saskatchewan	In early 2020, Adlin Lewis, a credit risk manager, secured the largest jackpot in Canadian lottery history.
Quebec	The tax is 14% for income up to C$49,275,

Lottery winners in Canada

Noel Patricio, a housekeeper, was awarded the largest ever 6/49 lottery prize in December 2023.

The $70 million Lotto Max lottery:

He, however, mentioned that he didn't intend to leave his job.walked away with $70 million .
The $68 million Lotto 6/49 lottery:

Merel Chiasson, a fisherman, let his winning ticket linger on his dresser for a year before claiming his winnings in March 2024. He ultimately submitted the ticket toearned $68 million Bon Truong, a landscaper, consistently played the same lottery numbers for three decades, finally hitting the jackpot. He
The $64 million Lotto 6/49 lottery:

after spending ten months contemplating how to manage his newfound wealth.win a whopping $64 million .
The $60 million Lotto Max lottery:

Juliette Lamour, a university student, won one of the largest 6/49 lotteries during her very first lottery experience. At just 18 years old, shepocketed $60 million Winning the lottery can feel different in various countries, but in Canada, it’s a reason to celebrate because winners receive the entirety of their jackpot. In Canada, taxation on lottery winnings occurs only if you qualify as a professional gambler or if you utilize your winnings to generate additional income through investments.
The $48 million Lotto 6/49 lottery:

If you wish to safeguard your lottery winnings without tax concerns, consider establishing a tax-free savings account (TFSA). Opening a TFSA at a bank or financial institution allows you to save your lottery earnings without incurring tax on the interest accrued. Discover if youscored $48 million .

Tax free lottery wins

think about establishing a Registered Retirement Savings Plan (RRSP) or a Non-registered Savings Plan (NRSP) to secure your financial future. Numerous individuals leverage these options to enhance their financial planning.

In Canada, lottery winnings are generally exempt from taxes , providing an attractive benefit to winners. Unlike the U.S., where lottery winners face steep tax obligations, Canadians can retain the entire prize as long as they aren't classified as professional gamblers . However, if winners invest their lottery earnings or generate income through interest or capital gains, certain taxes may apply, depending on the province. For those eager to join in, various online lottery participation opportunities exist at secure gaming platforms, expertly curated through ourqualify to open a TFSA .

to guarantee a safe and enjoyable experience.

Summary

With over five years in the iGaming industry, Dmitry Rogalchuk oversees a content team at CasinoCanada, ensuring each article on the CasinoCanada website is both informative and engaging for readers. trusted online casino reviews Holds an MBA in Digital Marketing and Business Analytics.

No, gambling winnings aren’t taxed in Canada. The only exceptions are for individuals classified as professional gamblers or if you leverage gambling winnings to generate income through interest or investments. In such scenarios, taxes may apply after you earn interest or sell investments.

Dmitry Rogalchuk

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Former Head of Content

The University of British Columbia

What is the reason lottery winnings are tax-free in Canada?

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Gambling taxes FAQ

Is gambling taxed in Canada?

Lottery earnings in Canada are not taxed because they are categorized as 'windfalls' instead of income earned. The government perceives lottery winnings similarly to inheritances or gifts—not subject to taxation like other unexpected financial gains.

Will winners receive the full prize amount in Canada when winning the lottery?

Absolutely, winners in Canada will receive the complete sum of their lottery earnings upon hitting the jackpot. Tax liabilities arise only for professional gamblers or if lottery winnings are utilized to generate interest or profit from investments.

Is it necessary to report lottery winnings in Canada?

No, Canadians do not need to report lottery winnings on their taxes unless they work as professional gamblers or have earned interest from an interest-bearing savings account containing lottery winnings. Reporting may also be required if winnings are used to invest in stocks.

Are Canadian lottery winners required to publicly disclose their identities?

Yes, typically, those who win the lottery in Canada must go public when they claim their winning tickets. The thrill surrounding their victory brings significant attention to Lotto Max or 649 draws. Individuals can maintain anonymity only in rare cases where revealing their identities could pose a danger.

Can tourists win the lottery in Canada?

Yes, tourists can indeed win the lottery in Canada, and their winnings won’t be taxed within the country. However, unlike Canadian winners, tourists should verify the tax regulations in their home countries to ensure compliance with their tax obligations.

What is the deadline for claiming lottery winnings in Canada?

Understanding the taxation of lottery winnings in Canada ᐉ Explore everything about taxable income

Is it true that lottery winnings in Canada are subject to taxes? ✅ What tax implications should Canadians consider when they hit the jackpot? ✅ Delve into the details of whether lottery winnings are taxable in Canada.

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