Lottery winnings tax in California
Yes. California Lottery prizes are fully exempt, including Powerball and Mega Millions tickets bought through the California Lottery. Other states' lottery prizes are taxable.
Updated · 2026 tax rules · How we calculate
You keep
$39,650
Cash at payout
$38,000
Total tax
$10,350
Over-withheld
$1,650
- Form W-2G
- Yes
- Federal withholding at payout
- $12,000
- Federal tax on the winnings
- $10,350
- State tax
- $0
- Over-withheld
- $1,650
- You keep
- $39,650
$50,000 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 exempts its own lottery prizes from state income tax.
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.
$50,000 minus $10,350 in federal and state tax: an effective rate of 20.7%.
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.
The rules
- California tax
- 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]
- Federal tax form
- Lottery prizes of $2,000 or more that are at least 300 times the ticket price are reported on a W-2G. The threshold was $600 before 2026.[2]
- Federal withholding
- 24% is withheld from lottery prizes of more than $5,000 (minus the ticket price). No 300x test applies to lotteries.[4]
- California withholding
- California withholds 7% for nonresidents on lottery winnings over $1,500.[5]
- Gambling losses
- You can deduct losses as a California itemized deduction, up to your winnings. Losses on California Lottery tickets are not deductible.[6]
- Visitors
- California taxes nonresidents on lottery winnings won there, so visitors may need to file a nonresident return.[5]
- Where to play
- California runs a state lottery.[7]
What you keep at different amounts
For a single filer with $60,000 of other income and no gambling losses, living and winning in California.
| Won | W-2G | Withheld | Federal tax | State tax | You keep |
|---|---|---|---|---|---|
| $1,500 | No | $0 | $180 | $0 | $1,320 |
| $2,000 | Yes | $0 | $240 | $0 | $1,760 |
| $10,000 | Yes | $2,400 | $1,550 | $0 | $8,450 |
| $50,000 | Yes | $12,000 | $10,350 | $0 | $39,650 |
| $100,000 | Yes | $24,000 | $22,114 | $0 | $77,886 |
Assumes a $2 ticket price, so the 300x test is met at every amount shown.
Questions
- How much is California tax on lottery winnings?
- 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]
- Does California withhold tax from lottery winnings?
- California withholds 7% for nonresidents on lottery winnings over $1,500.[5]
- Do visitors pay California tax on lottery winnings?
- California taxes nonresidents on lottery winnings won there, so visitors may need to file a nonresident return.[5]
More for California
All of California's gambling tax rules · Lottery in every state
Sources
- [1] FTB 2025 Instructions for Schedule CA (540), line 8b · checked September 22, 2026
- [2] IRS, Instructions for Forms W-2G and 5754 (01/2026) · checked September 22, 2026
- [3] Federal Register, REG-113229-25 proposed rule (Apr. 17, 2026) · checked September 22, 2026
- [4] 26 U.S. Code § 3402 (withholding) · checked September 22, 2026
- [5] FTB - Withholding on nonresidents · checked September 22, 2026
- [6] FTB - Gambling · checked September 22, 2026
- [7] American Gaming Association, State of the States 2025 · checked September 22, 2026