When the lottery is at the highs it has been recently, everyone is buying a ticket in the hope that they might be the one to win the millions if not billions of dollars. Around these times a very common question is asked is, “how are lottery winning taxed in California.” Although many California residents have made it big, the Golden State’s tax landscape can cast a shadow on the thrill of hitting the Jackpot. In this blog post we will go into the specifics of how lottery winnings are taxed. Also whether or not there are tax planning opportunities to take to reduce the lottery winnings.California, unlike some other states, does not levy income tax on lottery tickets purchased within its borders. However, this doesn’t mean the taxman won’t come knocking when fortune smiles upon you. Once you win the lottery, the state’s income tax laws swing into action.Lottery winnings, considered taxable income, are subject to both federal and state income taxes. The Internal Revenue Service (IRS) imp...
