Lottery Tax Calculator
Won the lottery? Find out how much you'll actually take home after federal and state taxes. Compare lump sum cash option vs annuity payments to see which puts more money in your pocket.
Your Take-Home
$421,231
| Item | Amount |
|---|---|
| Advertised Jackpot | $1,000,000 |
| Lump Sum Payout (~60%) | $600,000 |
| Federal Tax (29.8% effective) | −$178,769 |
| State Tax (0.0%) | −$0 |
| Take-Home | $421,231 |
| When the federal tax is paid | Amount |
|---|---|
| Withheld at payout (24.0%, Form W-2G) | $144,000 |
| Balance due when you file | $34,769 |
Your 29.8% effective rate is above the national median of 26.8% for incomes $500k–$1M.
Based on IRS Statistics of Income data. Individual results vary.
Total Tax
$178,769Effective Tax Rate
29.8%Take-Home
$421,231This is an estimate. Lump sum is typically ~60% of the advertised jackpot. Federal tax uses the single-filer brackets with the prize as your only income and no deductions; your actual tax depends on your total taxable income and filing status. Some states have additional local taxes. Consult a tax professional for large winnings.
Edit inputs ↑How lottery winnings are taxed
Lottery and gambling prizes are ordinary income, not capital gains. Two layers of tax apply:
- Federal withholding (24%): the payer withholds 24% on any prize over $5,000 and reports it on Form W-2G (IRS Topic 419). This is only a prepayment.
- Actual federal tax (up to 37%): winnings stack on top of your other income. A multi-million-dollar prize pushes almost all of it into the 37% top bracket — which begins at $640,600 of taxable income for a single filer in 2026 (IRS Rev. Proc. 2025-32). Only the part above that line is taxed at 37%; the calculator runs the prize through every single-filer bracket. You settle the gap between the 24% withheld and the tax owed when you file.
- State tax (0%–10.9%): most states tax winnings at their top income tax rate. Nine states levy no income tax at all, and California exempts state-lottery prizes by statute.
Choosing the lump sum pays roughly 60% of the advertised (annuity) jackpot up front, taxed all at once. The annuity pays the full advertised amount in about 30 graduated annual payments (Powerball: 30 payments over 29 years; Mega Millions: each payment 5% larger than the previous one), spreading the income — though each payment is still taxed at the rate that year's total income lands in.
Worked examples
$1,000,000 jackpot — lump sum, New York
- Cash option (~60%): $600,000
- Federal tax (29.79% effective): −$178,769, of which $144,000 is withheld at payout and $34,769 is due at filing
- New York tax (10.9%): −$65,400
- Take-home: $355,831 (40.69% effective)
$100,000,000 Powerball — lump sum, Florida (no state tax)
- Cash option (~60%): $60,000,000
- Federal tax (36.93% effective): −$22,155,957, of which $14,400,000 is withheld at payout and $7,755,957 is due at filing
- Florida tax (0%): −$0
- Take-home: $37,844,043 (36.93% effective)
Lump sum vs annuity on the same $100,000,000 jackpot (Florida): the lump sum nets $37,844,043 today, while the annuity pays the full $100,000,000 and, in this simplified model of 30 equal payments, nets $64,321,283 in total (an average of $2,144,043 per year after tax; real annuity payments start lower and grow 5% a year). The annuity yields more nominal dollars and keeps each year's rate lower, but the lump sum gives immediate control and investment flexibility.
Lottery tax by state (2026)
Top marginal state income tax rate applied to lottery winnings. No state tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming — plus California, which exempts state-lottery prizes. Some cities (e.g. New York City, Yonkers) add a local tax on top.
| State | Top rate on winnings |
|---|---|
| Hawaii | 11% |
| New York | 10.9% |
| District of Columbia | 10.75% |
| New Jersey | 10.75% |
| Oregon | 9.9% |
| Minnesota | 9.85% |
| Maine | 9.15% |
| Massachusetts | 9% |
| Vermont | 8.75% |
| Wisconsin | 7.65% |
| Connecticut | 6.99% |
| Delaware | 6.6% |
| Maryland | 6.5% |
| Rhode Island | 5.99% |
| New Mexico | 5.9% |
| Virginia | 5.75% |
| Montana | 5.65% |
| Kansas | 5.58% |
| Idaho | 5.3% |
| South Carolina | 5.21% |
| Alabama | 5% |
| Georgia | 4.99% |
| Illinois | 4.95% |
| Missouri | 4.7% |
| West Virginia | 4.58% |
| Nebraska | 4.55% |
| Oklahoma | 4.5% |
| Utah | 4.45% |
| Colorado | 4.4% |
| Michigan | 4.25% |
| Mississippi | 4% |
| North Carolina | 3.99% |
| Iowa | 3.8% |
| Arkansas | 3.7% |
| Kentucky | 3.5% |
| Pennsylvania | 3.07% |
| Louisiana | 3% |
| Indiana | 2.95% |
| Ohio | 2.75% |
| Arizona | 2.5% |
| North Dakota | 2.5% |
| Alaska | 0% |
| California | 0% (lottery exempt) |
| Florida | 0% |
| Nevada | 0% |
| New Hampshire | 0% |
| South Dakota | 0% |
| Tennessee | 0% |
| Texas | 0% |
| Washington | 0% |
| Wyoming | 0% |
Frequently asked questions
How are lottery winnings taxed?
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.
Lump sum vs annuity — which is better?
The lump sum (cash option) is the cash in the prize pool, a fraction of the advertised jackpot that moves with interest rates, and it is taxed all at once. The annuity spreads payments over about 30 years (Powerball: 30 graduated payments over 29 years; Mega Millions: each annual payment 5% larger than the last) 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.
Which states don't tax lottery winnings?
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).
Do I have to pay taxes on small lottery prizes?
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. If you itemize deductions you can deduct gambling losses, but only up to the amount of your winnings, and for tax years beginning after 2025 only 90% of the losses count.
How much do I keep if I win $1 million in the lottery?
On a $1 million lottery win, the IRS withholds 24% ($240,000) immediately. Your actual federal tax depends on total income and is figured through the progressive brackets: only the part of the win above the 37% threshold is taxed at 37%, so for a single filer with no other income the federal bill on $1 million is well under $370,000. Most states with an income tax add more, up to roughly 11% in the highest-rate states.
Are lottery winnings taxed differently than regular income?
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.
Sources
Your lottery winnings tax also depends on where you live.
State taxes can significantly change your total liability. See how it varies.
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