How lottery winnings are taxed
Lottery prizes are taxable income. When you claim a prize worth more than $5,000 after subtracting the ticket price, the lottery withholds 24% for federal income tax. That is a prepayment, not the final bill: a jackpot pushes you into the top federal bracket — 37% in 2026 on taxable income over $640,600 for a single filer — so most large winners owe more when they file.
State tax depends on where you live and where you bought the ticket. Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming have no state income tax on lottery prizes, and California does not tax California Lottery winnings. New York's top rate is 10.9%, and New York City adds up to 3.876%. Compare every state in the lottery tax by state table.
Lump sum or annuity?
Powerball and Mega Millions jackpot winners choose between the cash value, paid at once, and an annuity of 30 payments: one right away and 29 yearly payments that each grow by 5%. The calculator above shows both after tax, and what the annuity is worth in today's money at a discount rate you choose. The lottery annuity calculator lists every payment.
What the calculator includes
- Federal income tax with 2026 brackets and the standard deduction for your filing status
- State income tax for all 50 states and Washington, D.C., plus New York City and Yonkers
- What is withheld when you claim — 24% federal, and the state rate where the state publishes it
- Jackpots shared by several winning tickets, and your share of an office pool
It does not include county or city income taxes outside New York City and Yonkers. The methodology explains every formula and source, and shows the official payouts we check our numbers against.
Common questions
How much tax do you pay on a $1 million lottery prize?
For a single filer with no other income in 2026, federal income tax on a $1,000,000 prize comes to about $320,000, leaving about $680,000 before state tax. Only $240,000 (24%) is withheld when you claim, so expect to pay the rest when you file.
Is the 24% withheld by the lottery the final tax?
No. The 24% federal withholding is a prepayment. Lottery winnings are taxed at your regular income tax rates, and a large prize is taxed mostly at the top 37% rate. The difference is due when you file your return for the year you claim the prize.
Which states do not tax lottery winnings?
Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming have no state income tax on lottery prizes. California taxes other income but exempts California Lottery prizes, including Powerball and Mega Millions. Alaska and Nevada have no income tax but also no state lottery.
What if I bought the ticket in another state?
The state where you bought the ticket may withhold its own tax, and your home state may also tax the prize, often with a credit for tax paid to the other state. This calculator assumes you bought the ticket in the state where you live.