Lottery Tax Calculator: What a Jackpot Really Pays

How lottery taxes actually work

Two different numbers get conflated: withholding and your final tax bill. On any US lottery prize over $5,000 the lottery immediately withholds 24% for the IRS (prizes over $600 are reported on a W-2G either way). But withholding is only a down payment — a jackpot pushes almost all of the prize into the top federal bracket, 37% in 2026, so winners typically owe the difference between 24% and ~37% when they file. States that tax lottery winnings withhold their own percentage at payout on top, and a few add local slices (New York City, Maryland counties, Ohio municipalities) at filing time.

A worked example: $500 million jackpot, cash option

Take the calculator's own default — a $500 million advertised jackpot with a $240 million cash option, roughly the middle of the usual 45–55% range. The lottery withholds 24% immediately: $57.6 million gone before you see the money, leaving $182.4 million. At filing, the federal bill on a prize this size lands close to the full 37% top-bracket rate — about $88.8 million in total federal tax — so you owe a further $31.2 million beyond what was already withheld. That leaves $151.2 million before any state tax. In a no-tax state (Texas, Florida and six others below), that $151.2 million is close to the final number. In New York, the state's own 10.9% withholding on the $240 million cash option — about $26.16 million — comes off on top, landing nearer $125 million net. Every figure here scales linearly, so halving or doubling the jackpot moves the net payout the same way — a $250 million jackpot with the same ~48% cash ratio and the same withholding rates nets almost exactly half of every figure above, and a $1 billion jackpot almost exactly double.

Lump sum or annuity: what you're actually choosing

The advertised jackpot is the annuity total: 30 graduated payments over 29 years, each 5% larger than the last, which together add up to the headline figure. The cash option is the money actually sitting in the prize pool today — typically 45–55% of the advertised jackpot, and the game publishes the exact figure for every draw. Neither choice escapes tax: the lump sum is taxed once at today's rates on the smaller amount, while each annuity payment is taxed in the year it arrives at whatever rates then apply. The annuity guarantees three decades of income and taxes the growth implicitly; the lump sum bets that your own investing (or spending) beats the annuity's built-in 5% escalation. Most US jackpot winners take the cash.

How the 30 annuity payments actually grow

The 5%-a-year escalation across exactly 30 payments means the first payment and the last are nowhere near equal shares of the total. Work the geometric series backward from the advertised jackpot and the first payment comes out to roughly 1.5% of the total, with the 30th and final payment around 6.2% — more than four times the first. On a $500 million jackpot, that is close to $7.5 million in year one rising to about $31 million in year thirty, before any tax in either year. That's also why the annuity is sometimes described as "back-loaded": most of the headline total arrives in its second half, which matters if you're weighing 30 years of rising payments against one smaller sum today.

Why your state matters so much

State withholding is the biggest controllable variable in the net figure. Eight of the states in the calculator take nothing — Texas, Florida, Washington, Wyoming, South Dakota, Tennessee, New Hampshire have no income tax, and California exempts lottery winnings specifically. At the other end, New York withholds 10.9% and Maryland 8.75% from residents. On a $240 million cash option that spread is worth over $26 million. Our state hub pages cover the local rules game by game — see the Texas Lottery, Maryland Lottery, Virginia Lottery, Georgia Lottery or Ohio Lottery guides for worked examples.

Bought in one state, live in another — which rate applies?

State lottery withholding is set by where the ticket was bought, not where you live — a resident of a high-tax state who buys a ticket while traveling through a no-tax state still has that no-tax state's rate withheld at payout. That is not necessarily the end of the story: your home state can still tax the win on your resident return once you file, sometimes with a credit for tax already withheld elsewhere so the same dollar isn't taxed twice at the full rate in both places, and sometimes not — the rules vary by state pair, and this is exactly the kind of cross-state question worth a preparer's time rather than a guess. The same principle covers a courier or messenger purchase: the withholding state is wherever the physical ticket was actually bought, which for an online or international order is the courier's or messenger's US state, not yours.

State-by-state lottery withholding, primary-sourced

The table below lists every state this calculator prices with a rate verified directly against that state's own lottery or revenue department (verified 2026-08-16) — not an aggregator's number, since two aggregator tables disagreed with each other and with the states' own sites on Virginia's rate when this page was first checked. Any state not listed here isn't guessed at: the calculator's own custom-rate field is there instead of a shipped-but-unverified figure.

State	Withholding at payout	Note
New York	10.9%	Withheld at the state's top rate. New York City and Yonkers residents face an additional local withholding.
Maryland	8.75%	Residents. Non-residents are withheld at 8%. County income taxes can add more at filing.
New Jersey	8%	8% on prizes over $500,000; 5% on $10,001-$500,000; prizes of $10,000 or less are exempt from NJ income tax.
West Virginia	6.5%	Per WV Code 11-21-77.
Massachusetts	5%	Withheld on prizes above $600. The 4% surtax on annual income over ~$1M can apply at filing.
Georgia	4.99%	Georgia's flat income-tax rate for 2026; the withholding rate follows the income-tax rate for the year you claim.
Ohio	4%	Withheld on prizes above $5,000. Municipal income taxes can add a local slice at filing.
Virginia	4%	Withheld on prizes above $5,000 (prizes over $600 are reported).
California	0%	California exempts California Lottery winnings from state income tax.
Delaware	0%	No state withholding at payout, but Delaware taxes lottery winnings on your state return.
Florida	0%	No state income tax.
New Hampshire	0%	No state income tax on lottery winnings.
South Dakota	0%	No state income tax.
Tennessee	0%	No state income tax on lottery winnings.
Texas	0%	No state income tax.
Washington	0%	No state income tax.
Wyoming	0%	No state income tax.

Federal withholding (24% resident / 30% non-resident alien) and the reporting thresholds above are set by the IRS and apply on top of whichever row applies to you; the rules are in IRS Publication 515.

Filing status and why your final bill can still move

Withholding at payout is the same 24% regardless of whether you file single, married filing jointly, head of household or another status — but your actual final federal bill is not, because each status has its own bracket thresholds. On a prize this large almost the entire amount sits in the top 37% bracket under any filing status, so the practical difference is usually small next to the headline number, but it is real — it shows up mainly in the lower brackets the first slice of the prize passes through on the way to the top rate, which is a few thousand dollars of difference on a multi-million-dollar prize, not a rounding error to ignore outright — and it is exactly the kind of detail a professional preparer should confirm for your specific numbers rather than this calculator's estimate (see IRS Publication 17 for the current-year bracket tables by filing status).

Not a US resident? The 30% rule

Non-resident aliens — including players abroad who win through a lottery messenger service — face a flat 30% federal withholding on US gambling winnings instead of the resident 24%/37% structure, unless a tax treaty says otherwise. State withholding still applies based on where the ticket was sold. Some countries then tax the win again at home; others (like Australia — see our guide to playing US Powerball from Australia) don't tax lottery winnings at all, making the US withholding the final cost. Whether your own country also taxes a US win, and at what rate, depends entirely on that country's own rules for foreign gambling income — we cover the specifics for dozens of countries in our how-to-play guides for Powerball and Mega Millions. The US federal rules for non-resident withholding are in IRS Publication 515.

Does the tax rate depend on which lottery game you won?

No. US tax law taxes a lottery prize as ordinary gambling income regardless of which game paid it — the 24% resident withholding, the ~37% top federal bracket, the 30% non-resident rate and every state's own rate apply identically whether the ticket was Powerball, Mega Millions, a state's own in-house draw, or a scratch-off. What differs between games is only the prize size and the payout structure (Powerball and Mega Millions both offer the same lump-sum-or-annuity choice; smaller state games rarely do), not the tax rate itself. If you're comparing the two US giants directly, the format and odds differences are covered in our Powerball vs Mega Millions guide.

How this calculator's numbers are kept honest

Every state rate in the table above is checked against that state's own lottery or department-of-revenue page before it ships, not copied from a third-party aggregator — two aggregator tables were found to disagree with each other, and with the states' own published rules, on Virginia's withholding rate when this policy was adopted. A state that hasn't been verified this way isn't listed with a guessed number; the calculator's custom-rate field is there instead, so you can enter a rate you've confirmed yourself rather than trust one we haven't. Federal figures (the 24% and 30% withholding rates, the 37% top bracket, and the $600/$5,000 reporting and withholding thresholds) come straight from the IRS. None of this is tax advice — a real filing depends on your full financial picture, and a jackpot-sized prize is exactly the situation worth paying a qualified preparer for, before you claim it rather than after.