sparkle-illustration

Register for a NerdWallet account to access simple tax filing for a $50 flat fee, powered by 

ColumnTax Logo

Lottery Tax Calculator: How Taxes on Lottery Winnings Work

Lottery winnings are subject to federal and sometimes state taxes. If you win big, plan for the taxes ahead of time.
Alana Benson
By Alana Benson 
Updated
Edited by Pamela de la Fuente Reviewed by Michael Randall

Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.

If you win the lottery, you may want to hit pause before you buy a yacht. You will almost certainly owe taxes on those winnings, and planning for those taxes will save you a headache come tax time.

» Dive deeper: Learn how the lottery works

How much are taxes on lottery winnings?

You don’t have to win the big jackpot to owe lottery taxes: The typical lottery tax is around 24% of winnings over $5,000, and is withheld by the lottery agencies. If your winnings push you into a higher tax bracket (a large prize may put you into the 37% bracket), you will probably have to pay additional taxes.

Lottery tax calculator

The lottery calculator below will help you estimate how much tax you may owe on lottery winnings. Enter the amount won and select the state you reside in to estimate potential state and federal taxes on the earnings.

NerdWalletTaxes Logo

Simple tax filing with a $50 flat fee for every scenario

With NerdWallet Taxes powered by Column Tax, registered NerdWallet members pay one fee, regardless of your tax situation. Plus, you'll get free support from tax experts. Sign up for access today.

for a NerdWallet account

checkmark

Transparent pricing

Hassle-free tax filing* is $50 for all tax situations — no hidden costs or fees.
checkmark

Maximum refund guaranteed

Get every dollar you deserve* when you file with this tax product, powered by Column Tax.
checkmark

Faster filing

File up to 2x faster than traditional options.* Get your refund, and get on with your life.

*guaranteed by Column Tax

illustration

How do lottery taxes work?

Like your paycheck, the government considers lottery winnings a form of income. How much tax you’ll owe will depend on your existing income, and by extension, your federal tax bracket. It’s a good idea to check with a tax advisor to see how federal and state taxes might affect your lottery winnings.

See how the tax brackets of two of the most common filing statuses (single filers and those who are married filing jointly) and rates work below, based on filing status.

2024 tax brackets: single filers

Tax Rate

Taxable income bracket

Tax owed

10%

$0 to $11,600.

10% of taxable income.

12%

$11,601 to $47,150.

$1,160 plus 12% of the amount over $11,600.

22%

$47,151 to $100,525.

$5,426 plus 22% of the amount over $47,150.

24%

$100,526 to $191,950.

$17,168.50 plus 24% of the amount over $100,525.

32%

$191,951 to $243,725.

$39,110.50 plus 32% of the amount over $191,950.

35%

$243,726 to $609,350.

$55,678.50 plus 35% of the amount over $243,725.

37%

$609,351 or more.

$183,647.25 plus 37% of the amount over $609,350.

2023 tax brackets: married, filing jointly

Tax rate

Taxable income bracket

Taxes owed

10%

$0 to $23,200.

10% of taxable income.

12%

$23,201 to $94,300.

$2,320 plus 12% of the amount over $23,200.

22%

$94,301 to $201,050.

$10,852 plus 22% of the amount over $94,300.

24%

$201,051 to $383,900.

$34,337 plus 24% of the amount over $201,050.

32%

$383,901 to $487,450.

$78,221 plus 32% of the amount over $383,900.

35%

$487,451 to $731,200.

$111,357 plus 35% of the amount over $487,450.

37%

$731,201 or more.

$196,669.50 + 37% of the amount over $731,200.

If you have a different tax filing status, check out our full list of tax brackets.

Do I have to pay state tax on lottery winnings?

Thirty-six states charge a tax on lottery winnings, with an average lottery tax rate of 5.6%. The actual amount will depend on your state’s particular tax rate.

Some states, such as California, Delaware, Florida, South Dakota, Tennessee, Texas, Washington and Wyoming, do not tax lottery winnings.

If you bought your winning ticket in a state you don’t live in, it’s unlikely that you’ll have to pay state taxes for the state in which you purchased the ticket — unless you bought the ticket in Arizona and Maryland. Those two states are the only ones that tax lottery winners who live out of state.

If your state doesn’t have a lottery (Alabama, Alaska, Hawaii, Nevada and Utah), or you live in a state that doesn’t tax lottery winnings, you may not need to pay any state tax (unless you bought your ticket in Arizona or Maryland).

File your taxes with confidence
Register for a free NerdWallet account to gain access to an exclusive one-hour, previously recorded webinar about tax filing and tax planning strategies. Watch on demand!

Should I take a lump sum payment or annuity payments?

You may have a choice as to how you receive the money: You may be able to take all the money right away or receive it in payments stretched out over many years (typically 29). Whatever you decide, you still have to pay taxes on your lottery winnings.

If you choose to receive the lump sum payment, you actually end up getting less money over the long haul. That’s because the total amount of the lottery prize is calculated based on the winner choosing the annuity payment plan. The base amount is invested for you, and you earn interest on it for the 29 years after you win the prize.

There also may be some tax advantages to taking the annuity payments since your taxes are deferred until you actually get the payments — plus, it’s harder to spend all the money at once if you’re getting payments for nearly 30 years.

The obvious advantage of taking a lump sum is that you’re handed a giant pile of cash all at once. Another consideration is that since the money is in your hands right away, you get more control over what to do with it — including how and where to invest your winnings if you choose to do so.

How do I deal with lottery taxes?

If you’ve come into a lot of money from winning the lottery it may be worth investing in a financial planner and a tax expert. These professionals may be able to help you make the most of your winnings and help you set yourself up for financial success long-term.

Some online financial advisors also have in-house tax experts who can work in tandem.

» Learn how to find the best tax pro near you

NerdWalletTaxes Logo

Simple tax filing with a $50 flat fee for every scenario

With NerdWallet Taxes powered by Column Tax, registered NerdWallet members pay one fee, regardless of your tax situation. Plus, you'll get free support from tax experts. Sign up for access today.

for a NerdWallet account

illustration
Get more smart money moves – straight to your inbox
Sign up and we’ll send you Nerdy articles about the money topics that matter most to you along with other ways to help you get more from your money.