Lottery Tax Calculator
Find out exactly how much you keep after taxes on any lottery jackpot — calculate federal tax, state tax, net lump sum, and compare all 50 US states.
Section 1: Jackpot Details
The advertised prize amount before taxes or cash discount.
The cash value is typically 60% of the jackpot.
Section 2: Tax Settings
How To Use
1. Enter Jackpot Specs
Enter the advertised jackpot amount and select your lottery game. The lump sum percentage auto-fills based on game type — Powerball and Mega Millions typically pay 60% of the advertised jackpot as the cash value option.
2. Find Your Tax Rate
Select your state to see the combined federal and state tax burden. States with no income tax like Florida, Texas, and California keep significantly more of their winnings.
3. Compare Payout Paths
Toggle between Lump Sum and Annuity to compare the two payment options. The annuity breaks down your annual net payment across the payment period.
4. Export Report
Download the free PDF with a complete tax breakdown and state comparison table — useful for financial planning discussions with your advisor.
Example Calculation
Jackpot: $500,000,000 | Powerball | Lump Sum 60% | California | Single
- Gross Lump Sum: $300,000,000
- Federal Tax (37%): -$111,000,000
- State Tax CA (0%): $0
- Total Tax: $111,000,000
- Net Take-Home: $189,000,000
- Effective Rate: 37%
- Mandatory Withholding: -$72,000,000
- Additional Owed at Filing: -$39,000,000
Net Take-Home: $156,300,000
You pay $32,700,000 MORE in taxes than a California winner.
Frequently Asked Questions
How much federal tax do you pay on lottery winnings?
All lottery winnings in the United States are taxed at the top federal income tax rate of 37% regardless of your normal tax bracket. Additionally the IRS requires a mandatory withholding of 24% at the time of payment. This means you will receive your check with 24% already withheld and then owe an additional 13% when you file your tax return — bringing the total federal tax to 37%. There is no way to reduce this through deductions or credits since lottery winnings are treated as ordinary income.
Which states have no lottery tax?
Nine states do not tax lottery winnings: California, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Alaska also has no state income tax. If you win a major jackpot, moving to one of these states before claiming your prize could save tens of millions of dollars in taxes. For example, on a $300 million lump sum winning in New York versus Florida, the difference is over $32 million in state taxes alone. Always consult a tax attorney before making residency decisions related to lottery winnings.
Should I take the lump sum or annuity?
For most winners the lump sum is financially superior if you invest the money wisely. Although the lump sum is typically only 60% of the advertised jackpot the annuity is paid over 29 to 30 years. If you invest the lump sum at a reasonable 7% annual return it will grow to far exceed the total annuity payments over the same period. The annuity is better for winners who lack financial discipline or fear they might spend the lump sum quickly. Use the Lottery Payout Calculator for a detailed comparison.
What is the mandatory federal withholding?
When you claim lottery winnings the lottery authority is required by law to withhold 24% for federal income tax before issuing your payment. This is not your total federal tax obligation — it is just the upfront withholding. Since lottery winnings are taxed at 37% you will still owe an additional 13% of your gross winnings when you file your annual tax return. For a $300 million lump sum that means $72 million is withheld immediately and an additional $39 million is owed at tax time.
Can I reduce my lottery tax through charitable donations?
Yes — donating a portion of your winnings to qualified charities before or after claiming can reduce your taxable income. However lottery winnings themselves are taxed at 37% regardless. If you donate $50 million to charity you may deduct up to 60% of your adjusted gross income for cash donations to public charities. Large winners often establish charitable foundations or donor-advised funds to manage giving while reducing the overall tax burden. Always work with a tax attorney and financial advisor immediately after winning.