2018 Federal Tax
Federal income tax rates for gambling withholdings decreased on January 1, 2018 from 25% to 24%. Because the IRS did not provide notification of this change until late January, the California State Lottery (Lottery) did not have the correct tax withholding rates programmed into its system until February 2, 2018.
If you received payment from the Lottery for a prize of $600 or more from January 1, 2018 through February 2, 2018, you may be eligible for a refund when filing your 2018 federal tax return. Depending on your residency status, the amount of your win, and your overall financial situation, you may receive a refund on your tax return or you may owe additional taxes to the IRS.
It is recommended you contact your tax professional to see how this withholding rate change impacts your tax situation. For more information, please contact the Lottery’s Tax Unit at 800-568-8379, press 2 and then press 6.