Calculators
US Lottery Tax for Canadians: How Withholding Works
A Canadian who wins a lottery prize in the US generally has 30% withheld from the gross prize. The calculator below shows the payout and how the Canada–US treaty treats gambling losses.
- withheld
- paid out
The US withholds 30% of the whole prize before paying it to a non-resident. In Canada, the prize itself is not taxed as income (how Canada treats lottery prizes).
Art. XXII(3) of the Canada–US tax treaty: US gambling losses
Enter a rate above to compare the amount withheld with that rate applied to the winnings left after losses. The sources state the withholding rate, not the rate of the final return.
What the sources say
In general, nonresident aliens are subject to chapter 3 withholding at 30% on the gross proceeds from gambling won in the United States if that income is not effectively connected with a U.S. trade or business and is not exempted by treaty.
Source: irs.gov (2026-10-29)
3. Losses incurred by a resident of a Contracting State with respect to wagering transactions the gains on which may be taxed in the other Contracting State shall, for the purpose of taxation in that other State, be deductible to the same extent that such losses would be deductible if they were incurred by a resident of that other State.
Source: canada.ca: united states america convention consolidate (2026-10-29)
You're filing Form 1040-NR solely to claim a refund of U.S. tax withheld at the source under chapter 3
Source: irs.gov: i1040nr.pdf (2026-10-29)
lottery winnings of any amount, unless the prize can be considered income from employment, a business or property, or a prize for achievement
Source: canada.ca: amounts that taxed (2026-10-29)
Forms named in the sources: W-8BEN (to claim treaty benefits) and 1040-NR (the return). This is arithmetic on your numbers, not tax advice.
Source: irs.gov (2026-10-29) · irs.gov: i1040nr.pdf (2026-10-29)
How it is calculated
Withheld = gross prize × the rate in the IRS quote. Paid out = gross prize − withheld.
Rate30%
Withheld$3,000.00 US
Deductible losses = the smaller of your US gambling losses and your US gambling winnings; a net loss is not deductible.
Deductible$0.00 US
From the win to the refund claim
- Withholding on the prizeUnder IRS Publication 515, nonresident aliens are generally subject to 30% withholding on gross gambling winnings in the US, unless exempted by treaty.
- Form W-8BEN with a TINTo claim treaty benefits on gambling income, the winner gives the payer Form W-8BEN with a US or foreign TIN.
- File Form 1040-NRA resident of Canada reports all gambling winnings, including lottery prizes, and may deduct US-source gambling losses within the limit in the instructions.
- Losses offset under the treatyUnder treaty Article XXII(3), wagering losses are deductible in the US to the same extent as for US residents.
- Refund claimForm 1040-NR can be filed to claim a refund of US tax withheld at source. The amount depends on the full return.
One example in numbers
| Step | Amount (example) |
|---|---|
| Gross prize | US$10,000 |
| Withheld at 30% (generally) | US$3,000 |
| Paid out | US$7,000 |
| Gambling losses in the same year | US$4,000 |
| Winnings taxed after losses | US$6,000 |
| Possible refund claim (assumes 30% rate) | US$1,200 |
Example values. The refund line assumes 30% applies to winnings left after losses: US$3,000 minus 30% of US$6,000. The actual tax on Form 1040-NR may differ.
Forms in plain words
| Form or guide | What it is for |
|---|---|
| Form W-8BEN | Given to the payer to claim treaty benefits; needs a TIN |
| Form 1040-NR | US return: report winnings, deduct losses, claim a refund |
| Publication 515 | IRS guide to tax withholding on nonresident aliens |
| Publication 519 | IRS tax guide for aliens, including nonresidents |
Lottery prizes vs some table games
Lottery prizes in the US
- Generally 30% withheld on the gross prize
- Canada is not on the Pub 515 list of exempt treaty countries
- US-source gambling losses may be deducted under the treaty
- Reported on Form 1040-NR with all gambling winnings
Some casino table games
- Pub 515: no US tax on nonbusiness winnings from these games
- Blackjack, baccarat, craps, roulette and big-six wheel
- Covers nonresident aliens playing in the United States
Related pages
Sources
- Department of Finance Canada – Canada–United States Tax Convention · checked Oct 29, 2026
- IRS – Instructions for Form 1040-NR (2025) · checked Oct 29, 2026
- IRS – Publication 515 (2026), Withholding of Tax on Nonresident Aliens · checked Oct 29, 2026
- IRS – Publication 519 (2025), U.S. Tax Guide for Aliens · checked Oct 29, 2026
- Ministère des Finances Canada – Convention fiscale Canada–États-Unis · checked Oct 29, 2026
Questions
How much tax does a Canadian pay on US lottery winnings?
IRS Publication 515 says nonresident aliens are generally subject to 30% withholding on gross gambling winnings in the US. Canada is not on its list of exempt treaty countries. Gambling losses may lower the US tax through Form 1040-NR.
Can Canadians get US gambling tax back?
The Canada–US treaty lets wagering losses be deducted as for US residents, and Form 1040-NR can claim a refund. For example, assuming 30% applies to the US$6,000 left after US$4,000 of losses, the claim would be US$1,200; the real result depends on the return.
What is form 1040-NR for?
It is the US tax return for nonresident aliens. A resident of Canada reports all gambling winnings on it, including lotteries, may deduct US-source gambling losses and can file it to claim a refund of US tax withheld at source.
Do I need a W-8BEN to claim the treaty on gambling winnings?
Publication 515 says claimants must give the payer Form W-8BEN with a US or foreign TIN to claim treaty benefits on gambling income not effectively connected with a US trade or business.
Are US lottery winnings taxable in Canada?
This page covers the US side only. For Canadian tax on lottery prizes, see Are Lottery Winnings Taxable in Canada?. For a prize won abroad, ask a tax professional.