Lottery Calculator

The total tax depends on your prize amount, your state, and your filing status. The IRS withholds 24% right away. Most big winners also fall into the 37% top federal bracket, so they owe extra at tax time. State taxes range from 0% to over 10%. In total, expect to lose about 30% to 50% of your prize to taxes.

When you win a lottery prize over $5,000, the lottery automatically takes out 24% for federal taxes before paying you. This is called mandatory withholding. It goes straight to the IRS. However, 24% is usually not enough to cover your full tax bill, so you will likely owe more when you file your return.

These states have no state tax on lottery winnings: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. California also does not tax lottery prizes. If you live in one of these states, you only pay federal tax on your winnings.

It depends on your goals. The lump sum gives you cash now, but you get less than the full jackpot (usually about 60%) and pay all your taxes at once. The annuity pays the full jackpot over many years with taxes spread out. The annuity often results in more total money, but the lump sum lets you invest or use the money right away. Use the comparison table in this calculator to see the difference for your specific prize.

The advertised jackpot is the total you would get if you chose the annuity paid over many years. The lump sum is the actual cash the lottery has on hand right now. It is usually about 50% to 65% of the advertised amount. The rest comes from interest the lottery would earn if it invested the money and paid you over time.

Yes. You still owe federal taxes no matter where you live. The IRS taxes all lottery winnings as ordinary income. Living in a no-income-tax state only means you skip the state portion.

Your effective tax rate is the total percentage of your winnings that goes to taxes. It combines all federal and state taxes into one number. For example, if you win $1,000,000 and pay $400,000 in total taxes, your effective tax rate is 40%.

Your filing status sets the income ranges for each federal tax bracket. For example, married filing jointly has wider brackets, so more of your income is taxed at lower rates before hitting the top 37% bracket. Single filers reach the top bracket sooner. For large jackpots, the difference is usually small since most of the winnings land in the top bracket regardless.

If the 24% withholding is more than your actual tax bill, you get a refund when you file your return. This can happen with smaller prizes where your income does not reach the higher tax brackets. The calculator shows this as a negative number under "Additional Federal Tax Owed."

Lottery winnings are taxed as ordinary income. They are not capital gains. This means your prize is added to your other income for the year and taxed at your regular income tax rates, which go up to 37% for federal taxes.

Yes. With the annuity, you receive one payment each year. Each payment is taxed as income in the year you receive it. You pay federal and state taxes on every annual payment. The annuity schedule in this calculator shows the estimated tax for each year.

The cash value percentage is how much of the advertised jackpot you get if you choose the lump sum. It is usually around 50% to 65%. Lottery websites list the exact cash value alongside the jackpot amount. For Powerball and Mega Millions, this calculator uses a default of 60%, but you can change it to match the actual number.

There is no special deduction for lottery winnings. However, some strategies may help. You can choose the annuity to spread income over many years. You can also claim your prize in a state with no income tax if you live there. Charitable donations can offset some income too. Talk to a tax professional for advice specific to your situation.

No. This calculator covers federal and state taxes only. Some cities, like New York City, charge an additional local tax on income. If your city has a local income tax, your actual take-home amount will be lower than what the calculator shows.

This calculator gives a close estimate based on 2025 federal tax brackets and current state tax rates. It uses the same progressive tax method the IRS uses. However, your actual tax bill may differ based on your full income, deductions, credits, and local taxes. For exact numbers, consult a tax professional.