ChamTax is a free calculator that shows the actual after-tax take-home amount for US Powerball and Mega Millions jackpots. Here's how a US lottery win is taxed for a Canadian resident — a flat 30% US withholding that's generally final, and $0 additional tax from the CRA.
Last updated: 2026-08-20
$1,000,000 win, Canadian resident estimate
At a reference USD→CAD rate of roughly 1.40, that $700,000 take-home is about CAD $980,000 — the calculator above converts your own amount using a live exchange rate.
No. The Canada Revenue Agency treats lottery and gambling winnings as a windfall gain — a one-off stroke of luck, not income you earned — and windfall gains fall outside the scope of the Income Tax Act entirely. This isn't a foreign tax credit offsetting some computed Canadian tax bill down to zero (the way it works for a few other countries this calculator covers); there's simply no Canadian tax base for lottery winnings in the first place, whether the ticket was bought in the US or in Canada. So a Canadian resident who wins a US Powerball or Mega Millions jackpot owes $0 additional Canadian tax on top of whatever the US withholds.
The US taxes nonresident aliens on lottery winnings at a flat 30% federal withholding rate (IRC §871(a)) — higher than the 24%-withheld/37%-top-rate treatment that applies to US residents, and withheld immediately when the prize is paid out.
Here's the nuance that trips a lot of people up: the US-Canada tax treaty (Article XXII, paragraph 3) does let Canadian residents deduct US gambling losses against US gambling winnings, which can reduce the 30% withholding in some cases. But that provision is written narrowly — it covers specific casino-style games (blackjack, baccarat, craps, roulette, big-6 wheel), not lottery winnings. Because lottery isn't on that list, there's no equivalent 1040-NR loss-deduction path to claim back any of the 30% withheld from a Powerball or Mega Millions prize. For a lottery win specifically, the 30% withholding is generally the final bill, not a deposit you can partially reclaim.
Moving a large lump sum from the US into a Canadian bank account doesn't create any extra tax by itself — but it will very likely be reported. Banks and other reporting entities must file an Electronic Funds Transfer Report with FINTRAC, Canada's financial intelligence unit, for any international transfer of CAD $10,000 or more. A six- or seven-figure inbound wire from a US lottery payout will be reported as a matter of course — this is a routine anti-money-laundering data feed, not an audit trigger or a tax event by itself, though FINTRAC can share intelligence with the CRA if there's reason to suspect tax evasion (which isn't the case here, since the prize itself isn't taxable). Your bank may also ask you to document the source of funds as part of its own customer due-diligence checks before releasing a very large transfer.
Keep your prize confirmation or payout documentation on hand — it's the easiest way to answer a bank's source-of-funds question quickly.
See your own after-tax amount as a Canadian resident
Open the calculator →The US withholds a flat 30% federal tax from a nonresident alien's lottery winnings (IRC §871(a)) before you ever see the money. On the Canadian side, the CRA treats lottery and gambling winnings as a windfall gain, not taxable income, so a Canadian resident owes $0 additional Canadian tax on top of that. The 30% US withholding is the whole story for most Canadian winners.
Generally, no — not for a lottery win specifically. The US-Canada tax treaty (Article XXII, paragraph 3) does let Canadian residents deduct US gambling losses against winnings to reduce withholding, but that provision only covers specific games like blackjack, baccarat, craps, roulette, and big-6 wheel. Lottery winnings aren't included, so there's no 1040-NR refund path the way there might be for a casino table-game win — the 30% is generally final.
No. The same CRA windfall-gain exemption that applies to a US lottery win also applies to Canadian lotteries like Lotto Max and Lotto 6/49 — winnings aren't considered taxable income under the Income Tax Act, so there's no federal or provincial tax owed on a domestic lottery prize either.
It can. Some US states also withhold their own state-level tax from nonresident winners on top of the federal 30%, while others don't tax lottery winnings at all. This calculator models the federal nonresident withholding only and doesn't add state-level withholding, so your actual take-home could be somewhat lower than the figure shown here depending on which state you played in.
Yes — the prize itself is a tax-free windfall, but income it earns afterwards follows Canada's normal investment-income rules. Interest from a savings account, GIC, or term deposit is fully taxable at your marginal rate. Canadian dividends get the dividend tax credit, which lowers their effective tax rate below interest income. Capital gains on investments bought with your winnings are taxed at Canada's standard 50% inclusion rate — a proposed increase to 66.67% on gains above $250,000 was announced in the 2024 federal budget but was formally cancelled by the federal government in March 2025 and never took effect.
Receiving a large one-off transfer from abroad triggers an Electronic Funds Transfer Report (EFTR) that your bank must file with FINTRAC (Canada's Financial Transactions and Reports Analysis Centre) under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act — this applies to any wire transfer of CA$10,000 or more, filed automatically by the bank rather than something you do. Separately, your bank will likely run its own customer due diligence and ask you to document the source of the funds before crediting a transfer this large — your prize claim paperwork and the IRS's Form 1042-S withholding statement are exactly what you'd use for that.
This page is an informational simulator only and does not broker or facilitate lottery ticket purchases. Actual tax owed depends on individual circumstances and the exchange rate/tax law in effect at filing time — consult a qualified tax professional familiar with both countries.