How much tax do you pay on lottery winnings?

Lottery winnings are taxed as ordinary income. Federal tax withholding is 24%, but your actual rate depends on your total income. The top federal bracket is 37% for winnings over $609,350. State taxes vary from 0% (in states like Florida, Texas) to over 10% (in California, New York).

Is it better to take lump sum or annuity for lottery?

The lump sum is typically about 50-60% of the advertised jackpot but gives you immediate access to invest. The annuity pays the full amount over 30 years with 5% annual increases, potentially totaling more but spread over decades. Your choice depends on investment skills, age, and financial goals.

Which states have no lottery tax?

States with no state income tax on lottery winnings include: Florida, Texas, Washington, Wyoming, South Dakota, Tennessee, New Hampshire, and Alaska. California also doesn't tax lottery winnings. However, you still owe federal taxes in all states.

How much would I take home from a $1 billion lottery jackpot?

For a $1 billion jackpot: The lump sum would be approximately $500-600 million. After 24% federal withholding (~$120-144M) and state taxes (0-10%), you'd take home roughly $350-500 million depending on your state. Use our calculator for exact amounts.

Actual Winnings — Free Lottery Tax Calculator

Calculate your real take-home from Powerball, Mega Millions & other lottery jackpots after federal and state taxes.

How Lottery Taxes Work in 2026

Lottery winnings are taxed as ordinary income in the United States. The IRS requires a mandatory 24% federal withholding on prizes over $5,000, but most jackpot winners owe significantly more—up to the 37% top marginal rate. In addition, most states levy their own income tax on lottery winnings, ranging from 0% in states like Florida, Texas, and California to over 10% in New York and New Jersey.

2026 Federal Tax Brackets for Lottery Winnings

Rate	Single Filers
10%	$0 – $11,925
12%	$11,926 – $48,475
22%	$48,476 – $103,350
24%	$103,351 – $197,300
32%	$197,301 – $250,525
35%	$250,526 – $626,350
37%	Over $626,350

Lump Sum vs. Annuity

Lottery winners can choose between a lump sum (about 50–60% of the advertised jackpot received immediately) or an annuity (the full jackpot paid over 30 annual installments with a 5% yearly increase). The lump sum offers immediate access but is taxed entirely in one year at the highest bracket. The annuity spreads the tax burden over 30 years, often resulting in more total take-home pay.

States With No Lottery Tax

Nine states have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Additionally, California does not tax state lottery winnings despite having a state income tax.

About Our Calculator

Actual Winnings uses the latest 2026 federal tax brackets and state-specific lottery tax rates to calculate your real take-home amount. We support Powerball, Mega Millions, California SuperLotto Plus, New York Lotto, and Florida Lotto. All calculations run in your browser—no sign-up required.

Note: Please enable JavaScript for the full interactive calculator experience with real-time jackpot data and personalized tax breakdowns.

Disclaimer: This calculator is for educational and entertainment purposes only. Consult a qualified tax professional for advice specific to your situation.