Lottery Tax Calculator

Lottery winnings are taxed as ordinary income by the federal government. The IRS withholds 24% from winnings over $5,000, but you may owe up to 37% depending on your total income. Most states also tax lottery winnings at their state income tax rate.

The lump sum gives you immediate access to about 60% of the advertised jackpot but is taxed all at once at the highest rate. Annuity spreads payments over 25-30 years and may result in lower annual taxes. Financial advisors often recommend lump sum for investment flexibility, but annuity provides more discipline and potentially lower lifetime taxes.

States with no income tax on lottery winnings include: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. California also doesn't tax lottery winnings (though it taxes other gambling income).

Yes, all gambling winnings are taxable income regardless of amount. However, the IRS only requires withholding on prizes over $5,000. Smaller wins should still be reported on your tax return. You can deduct gambling losses up to the amount of your gambling winnings if you itemize deductions.

On a $1 million lottery win, the IRS withholds 24% ($240,000) immediately. Your actual federal tax depends on total income — at the 37% top bracket, you'd owe about $370,000 in federal tax. Most states add 3%–13% more. After all taxes, expect to keep roughly $550,000–$720,000 depending on your state.

No. Lottery winnings are taxed as ordinary income at your regular federal tax rate (up to 37%). The IRS withholds 24% at payout as a prepayment, but your actual rate depends on total annual income. If you're already in a high bracket, you may owe additional tax when filing. State tax also applies in most states.