California(CA) Lottery Winnings Tax Information

You.ll be happy to learn that Lottery prizes are exempt from California state and local personal income taxes. However, the Internal Revenue Service (IRS) requires the California Lottery to withhold federal taxes from many prizes.

The withholding rate for federal income tax is based, in part, on a claimant.s resident status. The Lottery is required to withhold federal taxes of 25% for U.S. citizens and resident aliens providing a social security number, and 28% for U.S. citizens and resident aliens not providing a social security number. Claimants who do not mark the citizenship status on the Lottery Claim Form will have 30% withheld from all prizes. Federal tax rates are subject to change.

There may be an additional tax liability depending on a winner.s total financial situation. Contact a professional tax adviser to help you determine your total tax liability.

What Do I Need From the Lottery in Order to File My Tax Return?

As a California Lottery winner, an IRS W2-G Form will be mailed to you by January 31 for the previous tax year. This form reports the amount of your Lottery winnings and must be filed with your federal income tax return. You should also keep a copy for your records. Please remember to notify the Lottery.s Tax Unit or Investments Office if you have changed your address.