Updated Checked by the Tax-Services.ca editorial team How we check
No. In Canada, lottery and gambling winnings are generally not taxable, because the CRA treats a lottery prize as neither income nor a capital gain. You do not report the prize on your return. The interest, dividends or gains you earn by investing the money afterwards are taxable.
Why are lottery winnings not taxed in Canada?
The CRA’s income tax folio on lottery winnings says a prize from a lottery is not taxable as either a capital gain or income. It makes exceptions when the prize is really income from employment, business or property, or a prize for an achievement. The CRA’s list of amounts that are not reported or taxed also names lottery winnings of any amount.
What is taxable after you win?
Income earned on the prize is taxable, and the prize itself is not. The CRA says that, for example, interest earned on invested lottery winnings must be reported. If you put $100,000 in an account paying 3%, the $3,000 of interest is taxable income each year, while the $100,000 stays untaxed. Report that income like any other. Our page on tax brackets shows how it will be taxed, and the marginal tax rate calculator shows the effect of extra income.
What about winnings from outside Canada?
The CRA says lottery and gambling winnings from the United States are not taxable in Canada, so they do not go on your Canadian return. It also says you cannot claim a credit for tax withheld on those winnings. For the U.S. side, the CRA points to the IRS international taxpayer resources, so keep your paperwork.
Is there an exception?
If gambling is your business, the winnings can be taxable business income. The folio says games of pure chance, like lotteries, lack the badges of trade, so this is rare. Whether someone is in the business of gambling depends on all the facts. A prize for an achievement in your own field is treated as income too. If either might apply to you, speak to a licensed professional.
Do you pay the CRA anything to collect winnings?
No. A CRA taxpayer alert says no taxes or fees of any kind have to be paid on lottery winnings in Canada, and that unsolicited messages claiming otherwise are scams. Our page on how to spot a CRA scam lists the warning signs.
What should you do after a big win?
Keep the claim paperwork, put the money in a safe place and ask a licensed advisor about investing it. The article Canada lottery tax has more background.
For other payments, see the table on Is it taxable? and the income tax calculator.
Where does this information come from?
The general rule comes from the Canada Revenue Agency income tax folio on lottery winnings, the page Amounts that are not reported or taxed, the page Canadian residents going down south and a taxpayer alert on lottery winnings. Checked in October 2026. This is an independent information site: we provide no services, we do not represent the CRA or any organization, and we do not guarantee that anything here is accurate or current. We accept no liability for decisions based on it. Check the official source before you rely on it. See the full disclaimer.
Frequently asked questions
Do I have to report lottery winnings on my tax return in Canada?
No. The CRA lists lottery winnings of any amount among the amounts that are not reported or taxed, unless the prize counts as income from employment, a business or property, or is a prize for an achievement. Income earned on the winnings is reported.
Is interest on lottery winnings taxable?
Yes. Income earned on the prize is taxable, although the prize itself is not. If you invest $100,000 and earn $3,000 of interest in a year, that $3,000 is taxable income, reported like any other interest.
Are U.S. lottery or casino winnings taxable in Canada?
The CRA says lottery and gambling winnings from the United States are not taxable in Canada, so you do not report them on your Canadian return. It also says you cannot claim a credit for the tax withheld on them.
Can a professional gambler be taxed on winnings?
Possibly. If gambling is a business, the winnings can be business income, but the CRA says games of pure chance like lotteries lack the badges of trade. Whether you are in the business depends on all the facts of your situation.
Do I owe the CRA a fee to collect lottery winnings?
No. A CRA taxpayer alert says no taxes or fees of any kind have to be paid on lottery winnings in Canada, and that unsolicited messages claiming otherwise are scams. Treat any request for an upfront payment as a warning sign.