I won a sweepstake with a USA company

[Tax_Fanatic]

They retained 30% of the prize money and sent me the rest during 2025.

I've received a 1042-S form by mail, what do I need to do in TurboTax Online free

I hope I do not need to pay to enter this information in my tax filing.

[TurboTax_Susan]

Prize money from the US is not taxable. But you also can't claim any taxes paid on the money, either.

[Tax_Fanatic]

Thanks but I would still need to declare it as foreign income I assume I'm considered a resident of Canada for tax purposes.

I have doubts bc I have no idea how to do this with TurboTax free version as I do not want to pay for the more expensive options.

[TurboTax_Susan]

Lottery winnings are generally not taxable in Canada, unless the prize can be considered income from employment, a business or property, or a prize for achievement.

But you can double check with the Canada Revenue Agency (CRA) and confirm it with them. 

If you are in Canada or the United States, you can call the CRA at 1-800-959-8281. If you are elsewhere, you can call 613-940-8495. This page has more ways to contact the CRA: Contact the Canada Revenue Agency

If you do have to report it, foreign income requires TurboTax Do It Yourself (Online) Premier or better, or TurboTax Desktop, so you would have to pay to prepare your return.

[Tax_Fanatic]

Thanks for the clarification, I avoid calling the CRA bc it takes such a long time to be able to reach anyone, but the webpage is clear I think lottery winning and sweepstakes are non-taxable income and do not need to be declared, no matter if the prize is won outside of Canada.

Whatever the USA gov retained is unlikely I will get back any of it, but it makes things easier for me and also means I do not have to pay for filing taxes with TurboTax.