Gambling winnings tax in California

California allows gambling losses only as an itemized deduction on the state return, whether or not you itemize federally. Take its standard deduction and it taxes your gross winnings.

Checked against California’s own sources on 2026-09-25.

In short

If you win a California Lottery prize, California does not tax it. Winnings from lotteries that other states run are fully taxable.4, 7
A large win can bring you into California’s extra 1 percent on taxable income over $1,000,000. With it, the true top rate is 13.30 percent, not 12.3 percent.
For 2026, how the California worksheet treats the 10 percent of gambling losses that the federal 90 percent cap leaves out is not known until the 2026 Schedule CA is published.

How California treats gambling losses

California does not tie the deduction to your federal itemizing choice. You can itemize on the California return even if you take the federal standard deduction, but the losses count only if you do, in place of California's standard deduction.

The two examples below are the same numbers the calculator uses, worked at California rates.

Two examples, worked at 2026 California rates

A single filer with $60,000 of other income who takes the standard deduction on everything except gambling losses.

A losing year

You win $50,000 and lose $52,000, so you finish down $2,000.

Federal: $3,596
California: $364
Total: $3,960

You finished the year down and still owe tax.

Federally you itemize, so your losses offset your winnings, but the 2026 rule caps that deduction at 90 percent and leaves $3,200 taxable. California lets you deduct gambling losses as an itemized deduction on the state return, whether or not you itemize federally. Your California income, after the larger of the standard deduction and your itemized deductions, goes from $54,100 without the win to $60,000 with it. The extra $5,900 is taxed at graduated rates, which comes to $364.

A winning year

You win $50,000 and lose $10,000, so you finish up $40,000.

Federal: $10,350
California: $3,886
Total: $14,236

Federally you take the $16,100 standard deduction, which is worth more than itemizing, so your gambling losses do not reduce your federal tax at all. California lets you deduct gambling losses as an itemized deduction on the state return, whether or not you itemize federally. Your California income, after the larger of the standard deduction and your itemized deductions, goes from $54,100 without the win to $100,000 with it. The extra $45,900 is taxed at graduated rates, which comes to $3,886.

California income tax rates, 2026

Single filer thresholds. Married filing jointly and head of household use different bands. Married filing separately uses the single bands.

Taxable income	Rate
$0 to $11,456	1 percent
$11,456 to $27,157	2 percent
$27,157 to $42,861	4 percent
$42,861 to $59,498	6 percent
$59,498 to $75,197	8 percent
$75,197 to $384,109	9.3 percent
$384,109 to $460,927	10.3 percent
$460,927 to $768,213	11.3 percent
$768,213 and above	12.3 percent

The calculator also applies what this table leaves out: an extra rate on high incomes, a cut to itemized deductions above a line of income, taken before the table and an exemption credit off the tax, which falls as income rises.

The federal 90 percent loss limit in California

2, 3, 7, 11

From tax year 2026 the federal deduction for gambling losses is cut to 90 percent of what you lost, and never more than what you won. Public Law 119-21 did it, at section 70114(a), by rewriting 26 U.S.C. 165(d).

California does not apply the federal 90 percent limit, so a loss deduction on your state return is not cut to 90 percent.

California follows the federal code as it stood on 2025-01-01. The paragraph above says what this means for the federal 90 percent limit.

More about California

California Lottery prizes

California does not tax a prize from the California Lottery (Government Code 8880.68(b)). You subtract California lottery winnings on Schedule CA (540) Part I Section B line 8b column B, and you cannot deduct California lottery losses (Part II line 16 column B). Winnings from lotteries that other states run are fully taxable.4, 7

If you itemize

For 2026, the gambling losses on your federal Schedule A are after the federal 90 percent cap. How the California worksheet treats the other 10 percent is not known until the 2026 Schedule CA is published.

California has its own limit on itemized deductions. R&TC 17077(c) raises the income lines for that limit every year.5, 6

If you do not itemize federally but itemize for California, first complete federal Schedule A. Then check the box at the top of Schedule CA (540) Part II and attach the federal Schedule A.7

If you are married or an RDP and file separately, you and your spouse or partner must make the same choice. If one of you itemizes, both must.6

Exemption credits at high incomes

Your exemption credits start to fall when your federal AGI goes over a line for your filing status:9, 1

Filing status	Credits start to fall over (2025)
Single or married filing separately	$252,203
Head of household	$378,310
Married filing jointly	$504,411

These are the 2025 lines, because FTB has not published the 2026 lines. FTB says the complete 2026 amounts come in late December.9, 1

The extra 1 percent over $1,000,000

California charges an extra 1 percent on taxable income over $1,000,000 (Form 540 line 62). The rate table above does not show it, so the true top rate is 13.30 percent, not 12.3 percent.

If you are a professional gambler

If you are a professional gambler, California does not cap your wagering expenses other than losses at your winnings. Federal law does, so you make an adjustment on Schedule CA (540) Part I line 3 column B.7

About this estimate

The calculator counts an exemption credit for you, for your spouse on a joint return, and for one dependent on a head of household return. If you have more dependents, it shows a warning with what each further dependent loses.

If you are 65 or older, the calculator adds the $158 senior exemption credit for each person 65 or older, which falls with the other exemption credits at high income. It leaves out the Credit for Senior Head of Household.

The calculator uses the 2025 income lines for the California limit on itemized deductions. The law raises the lines every year, so for 2026 the limit can take less than the estimate shows.5, 6

Sources

Every figure above traces to a primary source: a statute, an administrative code, a state agency page, or official form instructions.

1. FTB Tax News, October 2026, "2026 Indexing": the 2026 California tax rate schedules X, Y and Z, the standard deduction of $5,900 or $11,800, and exemption credits of $158 a person, $316 joint and $491 a dependent (checked 2026-10-03)
2. R&TC 17024.5(a)(1)(Q), specified date of Internal Revenue Code conformity, as amended by SB 1435 (Stats. 2026, ch. 236), which keeps the date at January 1, 2025 (checked 2026-09-26)
3. FTB California conformity to federal law, SB 711 Conformity Act of 2025 (checked 2026-09-12)
4. Government Code 8880.68, California State Lottery Act of 1984, no state or local tax on lottery prizes (checked 2026-09-12)
5. R&TC 17077, section 68 applies with "Six percent" for "3 percent" and California applicable amounts, and 68(f) does not apply (checked 2026-09-26)
6. 2025 instructions for Schedule CA (540), Part II line 29 and its Itemized Deductions Worksheet: $252,203, $378,310 and $504,411 of Form 540 line 13, 80 percent, and lines 4, 9, 15 and gambling losses left out (checked 2026-09-26)
7. 2025 instructions for Schedule CA (540), Part I lines 3 and 8b, Part II line 16 and the Part II heading (checked 2026-09-12)
8. 2025 Form 540 booklet, 2025 California tax rate schedules X, Y and Z, and line 62 Behavioral Health Services Tax (checked 2026-09-12)
9. 2025 Form 540 booklet, line 32 and the AGI Limitation Worksheet: the AGI lines, which FTB has not yet published for 2026, and line 9, the senior exemption credit for each person 65 or older, counted in the worksheet (checked 2026-10-12)
10. RTC 17054.1, the $6 reduction for each $2,500 or fraction over the threshold, $12 on a joint return (checked 2026-09-25)

The federal rule, for the parts of this page that rest on it

11. Public Law 119-21 section 70114(a), which rewrote 26 U.S.C. 165(d) on wagering losses from tax year 2026 and sets out its text (checked 2026-10-18)

We could not confirm these from an official source: the payout at which withholding starts; the withholding rate; how the state treats a non-resident; whether any city or county tax applies.