Lottery Tax Calculator
Calculate your net lottery winnings after federal and state taxes for all 50 US states.
Enter Your Winnings
Lump sum is approximately 55% of the advertised jackpot
Your estimated take-home winnings
$387,953
After 29.46% effective tax rate
Tax Breakdown
Cash value before taxes
Winnings Distribution
How Lottery Taxes Work in the United States
Lottery winnings in the United States are subject to both federal and state income taxes. The IRS treats lottery winnings as ordinary income, meaning they are taxed at your marginal tax rate. For large jackpots, this typically means the top federal rate of 37%.
Federal Tax on Lottery Winnings
The federal government withholds 24% of lottery winnings over $5,000 upfront. However, your actual tax liability may be higher (up to 37%) depending on your total income for the year. The 2025 federal tax brackets apply progressively, meaning only the portion of income in each bracket is taxed at that rate.
States With No Lottery Tax
Nine states do not tax lottery winnings: California, Delaware, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you win a lottery prize in one of these states, you only pay federal taxes on your winnings.
Lump Sum vs Annuity
Most major lottery games offer winners a choice between a lump-sum payment and an annuity paid over 29 years. The lump sum is typically about 55% of the advertised jackpot. While the annuity provides more total money, the lump sum gives immediate access to invest the funds.
International Lottery Tax Comparison
Unlike the US, many countries do not tax lottery winnings at all. The UK, Canada, Australia, New Zealand, Ireland, and Germany all treat lottery prizes as tax-free windfalls. This means a $100 million lottery win in the UK results in $100 million take-home, while the same win in New York could result in less than $50 million after taxes.
Frequently Asked Questions
How much tax do I pay on a $1 million lottery win?
On a $1 million lottery win, you would pay approximately 37% in federal taxes ($370,000) plus state taxes ranging from 0% to 10.9% depending on your state. In a no-tax state like Florida, your take-home would be about $630,000. In New York, it could be as low as $521,000.
Can I reduce my lottery tax bill?
While you cannot avoid federal taxes on lottery winnings, you can reduce your tax burden by choosing the annuity option (spreads income over 30 years), donating a portion to qualified charities, or claiming the win through a trust (consult a tax professional).
Do I have to pay taxes on small lottery wins?
Yes, all lottery winnings are taxable income regardless of amount. However, prizes under $600 are typically not reported to the IRS by the lottery commission, meaning you are responsible for reporting them on your tax return. Prizes over $5,000 have federal taxes withheld automatically.