Lottery Winnings Tax 2026: US, Canada and Europe

Lottery winnings can look similar on a ticket, but tax rules, prize structures, odds and claim deadlines differ between countries. This guide explains the 2026 US gambling-loss deduction change and compares it with verified rules for Canada, the UK and France.

The 2026 US rule change in context

The most significant tax change in this comparison is in the United States. For tax years beginning after December 31, 2025, US taxpayers may deduct only the lesser of 90% of gambling losses or total gambling winnings on Schedule A, subject to the itemized-deduction rules. In practical terms, the deduction for gambling losses is limited to 90% of qualifying losses or the total gambling winnings, whichever is less.

That change applies to the treatment of gambling losses. It does not change the basic federal reporting rule for lottery prizes. US lottery winnings are fully taxable gambling income and must be reported on the federal tax return, even when the winner does not receive Form W-2G.

The comparison is not simply a matter of identifying which country has the lowest lottery tax. A winner may also need to distinguish a jackpot from another prize category, understand the applicable game structure, check how long a ticket remains valid and determine whether income earned after receiving a prize becomes taxable. The sections below separate those issues and use only the verified rules supplied for this 2026 comparison.

Lottery winnings tax 2026: the US basics

US lottery payers generally must withhold 24% of lottery proceeds when winnings minus the wager exceed $5,000. This withholding is an advance payment and may not equal the winner's final federal tax liability. The amount withheld should therefore not automatically be treated as the complete federal tax cost of the prize.

There is also a separate reporting threshold. For payments made during calendar year 2026, the minimum reporting threshold for Form W-2G gambling winnings is $2,000. Separate withholding and reporting conditions can also apply. The threshold for receiving a form and the rule requiring a winner to report taxable winnings are different questions.

The 2026 loss rule adds another layer. A taxpayer may deduct only the lesser of 90% of gambling losses or total gambling winnings on Schedule A, and the deduction remains subject to the itemized-deduction rules. This is a limit on the amount of gambling losses that may be deducted. It is not permission to omit lottery winnings from a federal tax return.

The US figures should be read together but not confused with one another. The $2,000 figure concerns the minimum reporting threshold for Form W-2G payments during calendar year 2026. The $5,000 figure is part of the general condition for the 24% withholding rule, based on winnings minus the wager. The 90% figure applies to the deduction limitation for tax years beginning after December 31, 2025.

For current multi-state draw information, readers can check Multi State lottery results while keeping the draw result separate from tax reporting and prize-claim questions.

Mega Millions taxes, odds and prize structure

Mega Millions is a useful US example because its current structure changed before 2026. The redesigned game was introduced for the April 8, 2025 drawing. It costs $5 per play, replacing the previous $2 ticket price. The cost of a play is a game rule; it does not determine how a prize is reported or whether withholding applies.

Under the current Mega Millions matrix, the jackpot odds are 1 in 290,472,336. The game uses 24 Mega Balls rather than the previous 25. The current overall odds of winning any prize are 1 in 23. These are different measurements: the first describes the chance of matching the jackpot combination, while the second covers all prize outcomes.

Current Mega Millions non-jackpot prizes range from $10 to $10 million. Every non-jackpot prize receives an embedded random multiplier of 2X, 3X, 4X, 5X or 10X. The multiplier is part of the current prize structure and explains why the non-jackpot range includes the stated amounts.

After a jackpot win, the current Mega Millions starting jackpot resets to $50 million rather than $20 million. That figure describes the starting jackpot for a new jackpot cycle. It does not describe the final amount a particular winner will keep after taxes or establish how every jurisdiction will pay a prize.

The tax question remains separate from the odds question. The general US withholding rule can apply when winnings minus the wager exceed $5,000, with 24% withheld. Withholding may not equal the final federal tax liability. Neither the jackpot odds nor the overall odds changes the requirement for a US winner to report fully taxable lottery winnings on a federal return.

California illustrates why the payment and claim details should be checked separately from the national game matrix. California's published Mega Millions information states that the jackpot is paid either as 30 graduated annual payments or as a reduced one-time cash option, subject to applicable rules. California's published information also has specific claim periods for ordinary prizes and jackpots, discussed below. Readers checking a California ticket can use the Mega Millions results for California page, but the ticket must be redeemed in California.

The supplied facts also caution against treating every non-jackpot amount as identical in every jurisdiction. The national Mega Millions matrix describes the current non-jackpot range and embedded multipliers, while California's published information states that its non-jackpot Mega Millions prizes are pari-mutuel rather than necessarily equal to the fixed amounts shown in the national matrix. The game odds and prize descriptions should therefore be read in the context of the relevant jurisdiction.

Canada: generally no tax on the prize itself

Canada takes a different approach to ordinary lottery winnings. Lottery winnings of any amount generally do not have to be reported or taxed unless the prize is considered income from employment, business or property, or is a prize for achievement. The basic Canadian position is therefore different from the US federal position, where lottery winnings are fully taxable gambling income.

The important distinction is between receiving the prize and earning income from it. Income generated after receiving Canadian lottery winnings, such as interest earned by investing the prize, is taxable and must be reported. The original prize and later income are separate questions under the verified Canadian rules.

The Canada Revenue Agency also states that a Canadian resident who receives US lottery or gambling winnings generally does not report those winnings as income on the Canadian tax return because they are not taxable in Canada. This describes the Canadian tax-return treatment for a Canadian resident. It does not replace the need to review the rules connected with the US ticket or payment.

Claim deadlines still matter when a prize is generally not taxed. Ontario lottery prizes from draw-based games generally must be claimed within one year of the relevant draw date. After that period, unclaimed prizes are forfeited under OLG's rules. The one-year period is measured from the relevant draw date, so the draw date should be identified when assessing whether an Ontario prize remains claimable.

The Ontario deadline demonstrates why tax treatment and prize administration should be checked independently. A prize may generally be outside Canadian income tax while still being subject to a firm claim period. A winner should not assume that a tax rule extends or changes the operator's deadline.

UK and France: different tax and claim questions

UK residents do not pay income tax on National Lottery wins, according to HM Revenue and Customs guidance. That is the verified income-tax position for the UK comparison. It should not be expanded into claims about every later form of income or every type of prize without a separate rule.

National Lottery draw-game prizes must generally be claimed within 180 days after the draw. Prizes not claimed within the applicable claim period are forfeited. The United Kingdom lottery results page can help readers identify draw information, but the result does not replace the applicable claim instructions or deadline.

France requires particular care because the verified material establishes EuroMillions odds, prize ranks and a claim deadline, but does not establish a current official French tax rule for ordinary EuroMillions winner taxation. It is therefore accurate to describe the French game and claim rules without declaring that a standard EuroMillions win is taxable or tax-free in every situation.

For EuroMillions in France, the jackpot odds are 1 in 139,838,160, based on matching five main numbers and two stars. The overall probability of winning any prize is approximately 1 in 13, and the game has 13 prize ranks. These figures cannot be directly substituted for the current Mega Millions figures because the games use different number structures and prize arrangements.

In France, a EuroMillions or My Million prize claim must generally be made within 60 days from the date of the last draw covered by the ticket. This is a distinct rule from the 180-day UK draw-game period, the one-year Ontario draw-based prize period and the California periods that differ between ordinary Mega Millions prizes and jackpots.

How to claim lottery winnings across the four markets

The practical starting point for a claim is the ticket and the game named on it. The applicable operator and jurisdiction determine the relevant deadline. The verified rules in this comparison do not support one universal claim period for all lottery tickets.

California provides two distinct Mega Millions claim periods. Ordinary Mega Millions prizes must be claimed within 180 days of the draw, while a Mega Millions jackpot ticket may be claimed within one year. The ticket must be redeemed in California. The distinction between an ordinary prize and a jackpot is important because one California deadline does not apply to every Mega Millions ticket.

Ontario's general rule for draw-based lottery prizes is one year from the relevant draw date, with unclaimed prizes forfeited after the applicable period. In France, the verified EuroMillions and My Million period is 60 days from the last draw covered by the ticket. In the UK, the general National Lottery draw-game period is 180 days after the draw, and prizes not claimed within the applicable period are forfeited.

These deadlines are not interchangeable. A winner should identify the draw date or the last draw covered by the ticket, depending on the jurisdiction's rule, and confirm the official claim instructions before the period expires. The tax treatment may be important, but it should be assessed separately from whether the prize remains within the applicable claim period.

The same separation applies to payment choices. California's published Mega Millions information describes a jackpot payment as either 30 graduated annual payments or a reduced one-time cash option, subject to applicable rules. That payment choice is a prize-payment feature, not a statement of the winner's final tax liability.

Comparing odds, prizes and taxes without mixing them up

The four markets illustrate several separate categories of information.

• Tax treatment: US lottery winnings are fully taxable gambling income at the federal level. Canada generally does not tax or require reporting of lottery winnings, subject to the stated exceptions. UK residents do not pay income tax on National Lottery wins. The verified French material in this comparison does not establish ordinary EuroMillions winner taxation.
• Prize structure: Current Mega Millions non-jackpot prizes range from $10 to $10 million and include embedded random multipliers. California's published information describes a jackpot choice between 30 graduated annual payments and a reduced one-time cash option. France's EuroMillions rules identify 13 prize ranks, but the supplied facts do not provide a complete list of French prize amounts.
• Odds: Mega Millions has jackpot odds of 1 in 290,472,336 and overall odds of 1 in 23. French EuroMillions has jackpot odds of 1 in 139,838,160 and overall odds of approximately 1 in 13. The figures describe different games and do not support a claim that number selection or a playing system improves a person's chances.
• Claim administration: California gives ordinary Mega Millions prizes 180 days and jackpots one year. Ontario generally gives one year for draw-based prizes. The UK generally gives 180 days for draw-game prizes. France generally gives 60 days for EuroMillions or My Million prizes.

Keeping these categories separate prevents common errors. A game can have a particular jackpot structure without determining its tax treatment. A country can generally exclude a prize from income tax while still enforcing a strict claim deadline. A withholding percentage can be stated without predicting a winner's final federal liability. Odds can describe the mathematical structure of a game without suggesting that a particular number choice is more effective.

The difference between a reporting threshold and taxable income is especially important in the US. A Form W-2G threshold concerns when the payer may have a reporting obligation for a payment. The separate federal rule says that lottery winnings are fully taxable gambling income and must be reported even when the winner does not receive that form. The absence of a form is not the same as an exemption from reporting.

A practical checklist for 2026 winners

First, identify the game, draw and jurisdiction connected to the ticket. For California Mega Millions, the ticket must be redeemed in California, and the applicable deadline depends on whether the prize is an ordinary prize or a jackpot. For an Ontario draw-based prize, the relevant draw date is central to the one-year claim period. For France, the EuroMillions or My Million period is counted from the last draw covered by the ticket.

Second, separate the prize from later income. In Canada, the prize generally is not taxable as income under the stated rules, but interest earned by investing it is taxable and must be reported. In the US, the prize itself is fully taxable gambling income and must be reported even without Form W-2G. The Canadian rule for later investment income should not be confused with the rule for the original lottery prize.

Third, record the applicable US figures without confusing them. For payments made during calendar year 2026, the Form W-2G minimum reporting threshold is $2,000. The general withholding rule for lottery proceeds applies when winnings minus the wager exceed $5,000, with 24% withheld. The 90% gambling-loss limit applies for tax years beginning after December 31, 2025 and remains subject to Schedule A itemized-deduction rules.

Fourth, review the payment structure where the game rules provide one. California's published Mega Millions information describes the jackpot as payable through 30 graduated annual payments or a reduced one-time cash option, subject to applicable rules. That description concerns how the jackpot may be paid; it does not establish the amount of federal tax ultimately owed.

Finally, check the deadline before making assumptions about the prize. California ordinary Mega Millions prizes, California jackpots, Ontario draw-based prizes, UK draw-game prizes and French EuroMillions or My Million prizes each have different verified periods. If a tax situation or claim instruction is unclear, the official lottery operator's instructions and qualified professional tax advice are appropriate sources for clarification.

Lottery play should be treated as entertainment, not as a way to improve financial security. Set a spending limit, avoid chasing losses and do not treat a win as guaranteed income. No number choice or system should be presented as changing the stated game odds.

FAQ

Are lottery winnings taxable in the US in 2026?

Yes. US lottery winnings are fully taxable gambling income and must be reported on the federal tax return, even when no Form W-2G is received. US lottery payers generally withhold 24% when winnings minus the wager exceed $5,000, but that withholding is an advance payment and may not equal the final federal tax liability.

What is the 2026 gambling-loss deduction change?

For tax years beginning after December 31, 2025, taxpayers may deduct only the lesser of 90% of gambling losses or total gambling winnings on Schedule A, subject to the itemized-deduction rules. This changes the permitted deduction for losses; it does not remove the requirement to report US lottery winnings.

What is the Form W-2G threshold for 2026 payments?

For payments made during calendar year 2026, the minimum reporting threshold for Form W-2G gambling winnings is $2,000. Separate withholding and reporting conditions can also apply, and the threshold does not change the rule that fully taxable US lottery winnings must be reported on the federal tax return.

Are Canadian lottery winnings taxed?

Canadian lottery winnings of any amount generally do not have to be reported or taxed unless the prize is considered income from employment, business or property, or is a prize for achievement. Income generated after receiving the winnings, such as interest earned by investing the prize, is taxable and must be reported.

Do UK residents pay income tax on National Lottery wins?

UK residents do not pay income tax on National Lottery wins, according to HM Revenue and Customs guidance. National Lottery draw-game prizes must generally be claimed within 180 days after the draw, and prizes not claimed within the applicable period are forfeited.

What is the EuroMillions tax and claim deadline in France?

The supplied verified material establishes a 60-day claim period for EuroMillions or My Million prizes, counted from the date of the last draw covered by the ticket. It does not establish a current official French tax rule for ordinary EuroMillions winner taxation, so a blanket taxable or tax-free conclusion should not be made from this comparison alone.

How do Mega Millions odds compare with EuroMillions odds?

Current Mega Millions jackpot odds are 1 in 290,472,336, with overall odds of 1 in 23. French EuroMillions jackpot odds are 1 in 139,838,160, with overall odds of approximately 1 in 13. These are odds for different games and do not show that a strategy or number-selection system improves the chance of winning.