California gambling winnings tax calculator
California taxes gambling winnings as ordinary income at graduated rates from 1% to 13.3%.
Updated · 2026 tax rules · How we calculate
You keep
$7,715
Cash at payout
$7,600
Total tax
$2,285
Over-withheld
$115
- Form W-2G
- Yes
- Federal withholding at payout
- $2,400
- Federal tax on the winnings
- $1,550
- State tax
- $735
- Over-withheld
- $115
- You keep
- $7,715
$10,000 is at or above the $2,000 reporting threshold, so the payer files a W-2G with the IRS and gives you a copy.
The payer holds back 24% of winnings over $5,000 and sends it to the IRS. It's a prepayment, not the final tax.
Winnings are ordinary income stacked on your other $60,000. Your top dollar lands in the 22% bracket.
California taxes gambling winnings as ordinary income.
More was withheld than these winnings add to your tax. The difference reduces what you owe on the rest of your return, or comes back as a refund.
$10,000 minus $2,285 in federal and state tax: an effective rate of 22.9%.
An estimate for 2026, not tax advice. It treats this win as your only gambling income for the year and leaves out local income taxes. Nothing you enter leaves your browser.
How California taxes gambling winnings
- State income tax
- California taxes gambling winnings as ordinary income at graduated rates from 1% to 13.3%.[1]Unverified
- Lottery prizes
- Yes. California Lottery prizes are fully exempt, including Powerball and Mega Millions tickets bought through the California Lottery. Other states' lottery prizes are taxable.[2]
- Gambling losses
- You can deduct losses as a California itemized deduction, up to your winnings. Losses on California Lottery tickets are not deductible.[3] How the federal 90% loss rule works
- Withholding
- Payers withhold 7% from nonresidents' California gambling winnings over $1,500 a year. Residents have no routine state withholding, only 7% backup withholding when federal backup withholding applies.[4]
- Nonresidents
- Yes. Nonresidents owe California tax on California-source gambling winnings and file Form 540NR. California Lottery prizes stay exempt.[4]
- Tax paid to other states
- Yes. Schedule S gives residents a credit for net income tax paid to another state on income sourced there.[5]
- Legal gambling
- Sports betting: not legal. State lottery: yes. Casinos: yes. Online casino: not legal.[6]
Also worth knowing
- If you itemize, you must remove losses on California Lottery tickets from your gambling-loss deduction, because California Lottery prizes are exempt.[2]
- Gambling losses are shielded from California's high-income limit on itemized deductions, like medical expenses and investment interest.[2]
- California did not adopt the 2018 federal rule that limits all wagering expenses, not just losses, to winnings. You adjust for it on Schedule CA line 3.[2]
Examples by game
For a single filer with $60,000 of other income and no gambling losses, living and winning in California. California ranks 49th of 51 for what you keep from a $10,000 sports bet, and 1st of 51 (tied with 9 other states) for a $1 million lottery prize. See every state ranked.
| Game | Won | Withheld | Federal tax | State tax | You keep |
|---|---|---|---|---|---|
| Sports betting | $10,000 | $2,400 | $1,550 | $735 | $7,715 |
| Casino and slots | $5,000 | $0 | $600 | $335 | $4,065 |
| Table games | $5,000 | $0 | $600 | $335 | $4,065 |
| Poker tournaments | $20,000 | $0 | $3,750 | $1,555 | $14,695 |
| Lottery | $50,000 | $12,000 | $10,350 | $0 | $39,650 |
| Daily fantasy sports | $5,000 | $0 | $600 | $335 | $4,065 |
| Horse racing | $8,000 | $1,920 | $1,110 | $575 | $6,315 |
Questions
- Does California tax gambling winnings?
- Yes, at graduated rates from 1% to 13.3%. Yes. California Lottery prizes are fully exempt, including Powerball and Mega Millions tickets bought through the California Lottery. Other states' lottery prizes are taxable.[1]Unverified
- Can you deduct gambling losses in California?
- You can deduct losses as a California itemized deduction, up to your winnings. Losses on California Lottery tickets are not deductible.[3]
- Does California withhold tax from gambling winnings?
- Payers withhold 7% from nonresidents' California gambling winnings over $1,500 a year. Residents have no routine state withholding, only 7% backup withholding when federal backup withholding applies.[4]
- Do nonresidents pay California tax on gambling winnings?
- Yes. Nonresidents owe California tax on California-source gambling winnings and file Form 540NR. California Lottery prizes stay exempt.[4]
California by game
Gambling across the border from California
Win in a neighboring state and both states can tax it: the state you won in as a visitor, and California as your home state, usually with a credit for the tax you paid there.
Sources
- [1] FTB, 2025 California Form 540 Booklet (Tax Rate Schedules) · checked September 22, 2026
- [2] FTB 2025 Instructions for Schedule CA (540), line 8b · checked September 22, 2026
- [3] FTB - Gambling · checked September 22, 2026
- [4] FTB - Withholding on nonresidents · checked September 22, 2026
- [5] FTB 2025 Instructions for Schedule S · checked September 22, 2026
- [6] American Gaming Association, State of the States 2025 · checked September 22, 2026
- [7] Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 · checked September 22, 2026
- [8] ADOR Private Taxpayer Ruling LR99-012 (1999) · checked September 22, 2026
- [9] ORS 316.127, Income of nonresident from Oregon sources · checked September 22, 2026