Want to win the lottery but the thought of paying back a large amount of taxes is getting you down? I have the solution for you: move to Canada. All lottery prizes in the country are tax free! Actually! Okay, maybe you have a better solution, like crossing the border to buy your lottery tickets. Not so fast. The US government will continue to collect taxes if you win, although the Canadian government will not.
Both the United States and Canada offer lotteries, but they differ in that they have different rules for payments. The main one, as you know, is that the United States taxes lottery winnings and Canada does not.
There are other payment differences. In Canada, if you win the lottery, you get all the money. So if the jackpot was, say, $ 25 million, you’d get a check for $ 25 million. In the United States, that same $ 25 million jackpot isn’t really $ 25 million. It may be $ 25 million amortized over 20 years or so, but if you want a cash payment, it would be, perhaps, $ 15 million. Less taxes, of course.
So that’s another difference. In the United States, you have options for your lottery payments. You can choose to take a smaller amount up front or all with installments over many years. There’s a lot to think about after winning a grand jackpot in the US and not so much in Canada.
When comparing the lottery payment options between the two countries, it would seem that it is better to live in Canada. But don’t forget, you will never see a lottery jackpot in Canada reaching the hundreds of millions of dollars level, but it is quite common in the United States. So maybe it is better to live in the United States. Decide for yourself.