Lottery Tax Calculator
See what a lottery jackpot is worth after federal and state taxes, why the 24% withholding isn't the whole bill, and how the cash lump sum compares with the 30-payment annuity.
Lottery tax calculator
How lottery winnings are taxed
- Federal: prizes over $5,000 have 24% federal withholding, but big prizes are taxed at your real rate, so most of a jackpot lands in the 37% bracket and you owe the difference when you file.
- State: from 0% to over 10%. California doesn't tax California Lottery prizes; Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming have no state income tax on them. Some cities (New York City) add local tax. Pick your state above and the calculator applies its 2026 income tax brackets to the prize.
Example: a $500 million Powerball jackpot with a $225 million cash option, single, $60,000 of other income, in a no-tax state: federal tax on the prize is about $83.2 million, leaving about $141.8 million. The 24% withholding ($54 million) leaves about $29 million still owed in April.
Lump sum or annuity?
Powerball and Mega Millions annuities pay the advertised jackpot in 30 payments over 29 years, each 5% larger than the last. The cash option is roughly what it costs the lottery to fund that annuity today. Taking the annuity spreads tax over 30 years and protects against overspending; the lump sum gives control and can be invested. Tax rates in future years may change either way.
Taxes on lottery winnings calculator: small prizes
All gambling and lottery winnings are taxable income, even under $600 and even if no form is issued. Prizes of $600+ (and 300× the ticket price) get a Form W-2G. You can deduct gambling losses only if you itemize, up to winnings (90% of losses from 2026). As a lottery calculator for smaller prizes, enter the prize as the cash option.
Common questions
How much tax do you pay on lottery winnings?
Federal tax up to 37% (24% withheld at payout), plus 0% to over 10% state tax.
How much is a $500 million jackpot after taxes?
With a $225 million cash option in a no-tax state, about $141.8 million after federal tax.
Is the lottery annuity better than the lump sum?
The annuity pays more in total and spreads tax; the lump sum gives control now. It depends on your investing discipline and goals.
Which states don't tax lottery winnings?
California (for its own lottery) and states with no income tax, including Florida, Texas, Washington, Tennessee, South Dakota and Wyoming.
Do I have to pay tax on small lottery wins?
Yes, all winnings are taxable income; $600+ prizes get a W-2G.
Sources
- IRS: 2026 inflation adjustments (Rev. Proc. 2025-32), via Journal of Accountancy
- Social Security Administration: 2026 contribution and benefit base
- IRS Topic 419: Gambling income and losses
- Powerball: Prize payout and annuity
Related
General information, not financial, tax or legal advice. Check important numbers with the official source before acting on them.