Are lottery winnings taxable in Canada?
No. The CRA says lottery winnings of any amount are not reported or taxed in Canada, unless the prize is really income from employment, a business or property. What you earn on the money afterwards is taxed: interest on invested winnings must be reported.
Checked 2026-11-11. Sources: CRA: Amounts that are not reported or taxed; CRA: Canadian residents going down south.
What the CRA says
You do not have to report certain non-taxable amounts as income, including: lottery winnings of any amount, unless the prize can be considered income from employment, a business or property, or a prize for achievement.
Income earned on any of the above amounts is taxable. For example, any interest that you earn when you invest lottery winnings must be reported on your return.
If you received US lottery or gambling winnings, do not report this income on your Canadian income tax return as this income is not taxable in Canada. Additionally, you cannot claim a credit for any taxes withheld on these winnings.
The detailed rules, including when gambling becomes a taxable business, are in the CRA's Income Tax Folio S3-F9-C1, Lottery Winnings.
Worked example
You win $1,000,000: no tax on the win. You put it in an account paying 4% a year: $1,000,000 × 4% = $40,000 of interest. If your tax rate on that income is 30%, the tax is $12,000 and you keep $28,000 a year.
What are the chances of a big win in the first place? See Lotto Max odds and Lotto 6/49 odds.
Questions
Do you pay tax on lottery winnings in Canada?
No. The CRA lists "lottery winnings of any amount" among amounts you do not report or pay tax on, unless the prize can be considered income from employment, a business or property, or a prize for achievement.
Is the interest on lottery winnings taxed?
Yes. The CRA says any interest you earn when you invest lottery winnings must be reported on your return. In our example, $1,000,000 earning 4% pays $40,000 of interest a year; at a 30% tax rate, $12,000 of it goes in tax.
Are casino or sports betting winnings taxable in Canada?
Not for most people. The CRA's folio on lottery winnings treats gambling gains as windfalls; they become taxable only when gambling is carried on as a business, for example by someone who plays in an organised, commercial way with skill and inside knowledge. If that may be you, ask the CRA or a tax adviser.
Do Canadians pay tax on US lottery or casino winnings?
Not in Canada. The CRA says US lottery or gambling winnings are not taxable in Canada and should not be reported on your Canadian return, and that you cannot claim a credit for any US tax withheld on them.
This page explains the CRA's published rules; it is not tax advice.