Lottery Tax Calculator

How Lottery Taxes Work

When you win a lottery jackpot, your winnings are subject to both federal income tax and (in most states) state income tax. The IRS automatically withholds 24% of the gross payout for federal taxes. However, since large lottery winnings push you into the top federal tax bracket of 37%, you'll owe additional taxes when you file your return.

State tax rates vary widely — from 0% in states like Florida and Texas to as high as 10.9% in New York. Some states also impose local/city taxes on lottery winnings.

Lump Sum vs. Annuity

Jackpot winners have two payout options:

• Lump Sum (Cash Option): Receive a fraction of the advertised jackpot that depends on interest rates (about 41% in October 2026); the calculator below uses a 60% estimate of the advertised jackpot as a single payment. You get the money immediately but the gross amount is lower.
• Annuity: Receive the full advertised jackpot paid out in 30 graduated annual payments over 29 years. Each payment increases by about 5% to account for inflation.

Most financial advisors note that the lump sum can be advantageous if invested wisely, as the returns may exceed the annuity value. However, the annuity provides guaranteed income and may result in lower taxes in individual years.

States With No Lottery Tax

You can buy a ticket and owe no state tax on the prize in these 8 states: California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming.

There's a distinction most rate tables gloss over: Alaska, Alabama, Hawaii, Nevada, and Utah also show 0%, but not because the prize is exempt. Alaska sells no lottery tickets, and the other four run no Powerball or Mega Millions. A 0% there isn't a tax advantage — it's a place you can't buy the ticket.

Lottery Tax Rate by State

Top marginal state income tax rate applied to lottery winnings, across all 50 states and Washington D.C., highest to lowest. These are the exact rates the calculator above uses.

Pick your state below for a full breakdown with worked jackpot examples.

State rates change when state tax codes change. Federal tax applies on top of every figure above.

Bought your ticket in Puerto Rico? See the Puerto Rico page (Powerball only; 20% withholding).

Why the 24% Withholding Isn't Your Final Bill

This is the single most common mistake winners make. The lottery withholds 24% for the IRS before it hands over the check, and it's easy to assume the tax question is settled. It isn't: 24% is a withholding, not the tax owed. Any jackpot-sized prize puts you in the top marginal bracket of 37%, so roughly 13 percentage points come due when you file.

On a $50 million cash option, those 13 points are about $6.5 million that was never withheld and is still owed. Winners who budget from the amount that lands in the account — rather than the after-tax amount — are exactly the ones who get caught short in April.

Where to Go Next

• Odds calculator — how unlikely it actually is to owe any of this.
• Jackpot tracker — the largest historical jackpots and their cash options.
• Powerball jackpot winners — real prizes, including the state the ticket was sold in.
• Powerball analysis and Mega Millions — draw frequencies and statistics.