Use this free lottery tax calculator to estimate how much of a lottery prize you’d actually keep after federal and state taxes. Compare the lump sum with the 30-year annuity, see your state’s tax, and find out how much more you may owe beyond the 24% the lottery withholds.
Jackpot cash values change with interest rates. Use the official cash value for your drawing. For a regular prize with no annuity option, use 100%.
Uses each state’s top 2026 income tax rate, which applies to most large prizes. California doesn’t tax state lottery winnings. Local taxes (like New York City’s) aren’t included.
You’d take home about
—
- Cash payout before taxes—
- Federal income tax—
- State income tax—
- Take-home—
Your 30 annuity payments after tax
Lump sum vs. annuity
| Option | Paid before tax | Total taxes | Take-home |
|---|
Federal tax uses 2026 IRS brackets and the standard deduction, with your other income held steady each year. The annuity assumes 30 yearly payments that rise 5% a year, like Powerball’s annuity. Future tax law, state moves, and deductions can change the result. Estimates for educational use, not tax advice.
How to Use This Lottery Tax Calculator
- Enter the prize. For a jackpot, use the advertised amount. For a smaller prize, enter what you won and set the cash value to 100%.
- Pick lump sum or annuity. For the lump sum, enter the cash value as a percentage of the jackpot. Lottery websites publish the exact cash value for each drawing.
- Choose your state, filing status, and other income. Your other income matters because lottery winnings are added on top of it for federal tax.
- Review your take-home pay and the lump sum vs. annuity table below the calculator.
How Lottery Winnings Are Taxed
The IRS treats lottery winnings as ordinary income, just like wages. They’re added to your other income and taxed through the federal brackets, so a large prize quickly reaches the top 37% rate.
The 24% withholding is not the full tax
When winnings minus the cost of the ticket are more than $5,000, the lottery must withhold 24% for federal income tax before paying you. For a large prize, your actual federal tax rate is much closer to 37%, so you’ll owe the difference when you file your tax return. Many big winners set that money aside right away.
For a smaller prize, the reverse can happen. If you’re single with $60,000 of other income and win $10,000, the lottery withholds $2,400, but your federal tax on the prize would be about $1,550. You’d get the difference back when you file.
Example: Taxes on a $100 Million Jackpot
Say you’re single with $60,000 of other income, and you win a $100 million jackpot with a cash value of 48% ($48 million).
| Texas (no state tax) | New York (10.9%) | |
|---|---|---|
| Cash payout | $48,000,000 | $48,000,000 |
| Federal tax withheld at payout (24%) | $11,520,000 | $11,520,000 |
| Total federal income tax | $17,727,180 | $17,727,180 |
| State income tax | $0 | $5,232,000 |
| Take-home | $30,272,820 | $25,040,820 |
In both cases, the lottery withholds $11.52 million for federal tax, but the full federal bill is about $17.7 million. That leaves roughly $6.2 million more to pay at tax time.
Lump Sum vs. Annuity
Jackpot winners usually choose between a one-time cash payment and an annuity. Powerball’s annuity pays 30 yearly installments, with each payment 5% larger than the last.
| $100M jackpot, single, Texas | Lump sum | Annuity |
|---|---|---|
| Paid before tax | $48,000,000 at once | $100,000,000 over 30 years |
| First payment | $48,000,000 | About $1,505,144 |
| Total federal tax | $17,727,180 | $36,015,407 |
| Total take-home | $30,272,820 | $63,984,592 |
The annuity pays more in total, but the lump sum gives you all the money now. Which is better depends on how you’d invest the cash, how much you value control and flexibility, and whether tax rates might change. A financial advisor and tax professional can help you weigh it.
State Lottery Taxes
State taxes on lottery winnings vary widely. In general:
- No state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming don’t tax lottery winnings as income.
- California doesn’t tax California Lottery winnings, including Powerball and Mega Millions tickets bought there, even though it has a state income tax.
- Highest rates: states such as New York, New Jersey, Oregon, and Minnesota have top rates near or above 10%. New York City and some other cities add local income tax.
If you buy a ticket in a different state from where you live, both states may claim tax, though your home state usually gives a credit for tax paid to the other state. The calculator uses your home state’s top 2026 income tax rate, which applies to most large prizes. Check with your state’s revenue department for exact rules.
Frequently Asked Questions
How much tax do you pay on a $1 million lottery win?
If you’re single with $60,000 of other income, the federal tax on $1 million would be about $337,180 under 2026 brackets, plus any state tax. The lottery would withhold $240,000 up front, so you’d owe the rest at tax time.
Do I have to pay taxes on small lottery prizes?
Yes. All gambling and lottery winnings are taxable income, even if no tax is withheld and you don’t receive a Form W-2G.
Can I reduce taxes on lottery winnings?
Options are limited. If you itemize deductions, you may be able to deduct some gambling losses and charitable gifts. Large winners usually work with a tax professional before claiming the prize.
Is the annuity taxed every year?
Yes. Each annual payment is taxed in the year you receive it, at that year’s federal and state rates.
More free calculators
Sources
- IRS: Instructions for Forms W-2G and 5754 (gambling withholding)
- IRS: Revenue Procedure 2025-32, 2026 tax rate tables and standard deduction
- IRS: Topic No. 419, Gambling income and losses
- Tax Foundation: 2026 State Income Tax Rates and Brackets
- California Franchise Tax Board: Gambling income (California Lottery winnings)
- Pennsylvania Department of Revenue: Lottery winnings
This calculator provides estimates for educational purposes only and is not tax, legal, or financial advice. Lottery winners should consult a qualified tax professional. Last updated: October 12, 2026.