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
$390,000
| Item | Amount |
|---|---|
| Advertised Jackpot | $1,000,000 |
| Lump Sum Payout (~60%) | $600,000 |
| Federal Tax (35.0%) | −$210,000 |
| State Tax (0.0%) | −$0 |
| Take-Home | $390,000 |
Your 35.0% 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
$210,000Effective Tax Rate
35.0%Take-Home
$390,000This is an estimate. Lump sum is typically ~60% of the advertised jackpot. Actual federal tax depends on your total taxable income. 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). You settle the gap between 24% withheld and your true rate 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 equal installments over 30 years, 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 (35%): −$210,000
- New York tax (10.9%): −$65,400
- Take-home: $324,600 (45.9% effective)
$100,000,000 Powerball — lump sum, Florida (no state tax)
- Cash option (~60%): $60,000,000
- Federal tax (37%): −$22,200,000
- Florida tax (0%): −$0
- Take-home: $37,800,000 (37% effective)
Lump sum vs annuity on the same $100,000,000 jackpot (Florida): the lump sum nets $37,800,000 today, while the 30-year annuity pays the full $100,000,000 and nets $63,000,000 in total ($2,100,000 per year after tax). 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% |
| New Jersey | 10.75% |
| Washington DC | 10.75% |
| Oregon | 9.9% |
| Minnesota | 9.85% |
| Maryland | 8.75% |
| Vermont | 8.75% |
| Maine | 7.15% |
| Connecticut | 6.99% |
| Delaware | 6.6% |
| South Carolina | 6.5% |
| West Virginia | 6.5% |
| Iowa | 6% |
| Rhode Island | 5.99% |
| New Mexico | 5.9% |
| Nebraska | 5.84% |
| Idaho | 5.8% |
| Montana | 5.75% |
| Virginia | 5.75% |
| Kansas | 5.7% |
| Arkansas | 5.5% |
| Georgia | 5.5% |
| Wisconsin | 5.33% |
| Alabama | 5% |
| Massachusetts | 5% |
| Mississippi | 5% |
| Illinois | 4.95% |
| Missouri | 4.8% |
| Oklahoma | 4.75% |
| Utah | 4.65% |
| Arizona | 4.5% |
| North Carolina | 4.5% |
| Colorado | 4.4% |
| Louisiana | 4.25% |
| Michigan | 4.25% |
| Kentucky | 4% |
| Ohio | 3.5% |
| Pennsylvania | 3.07% |
| Indiana | 3.05% |
| North Dakota | 2.25% |
| 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 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.
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. You can deduct gambling losses up to the amount of your gambling winnings if you itemize deductions.
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 — 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.
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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