Free Lottery Intelligence Platform

Lottery winnings are taxed as ordinary income at both the federal and state level. The total tax depends on the size of your prize and where you live. For large jackpots (multi-millions and above), you can expect to lose 37% to federal taxes alone, plus 0% to 10.9% in state taxes depending on your state.

Here's a quick breakdown: on a $100 million cash prize, you'd receive about $76 million after the initial 24% federal withholding. But when you file your tax return, you'd owe an additional ~$13 million in federal taxes (to reach the 37% bracket), plus any applicable state taxes. Your actual take-home on $100 million could be as low as $52-63 million depending on your state.

For lottery prizes over $5,000, the IRS requires an automatic 24% federal tax withholding. This is deducted before you receive your prize. However, this 24% is just a down payment — it's not your final tax rate.

Most lottery jackpot winners end up in the 37% top federal tax bracket (for income over $626,350 in 2025). This means you'll owe an additional 13%+ when you file your annual tax return. For example, on a $200 million lump sum, the initial withholding would be $48 million, but your total federal tax liability would be approximately $74 million — leaving a $26 million shortfall due at tax time.

This depends on your financial discipline and goals. The lump sum gives you about 50-60% of the advertised jackpot immediately, letting you invest it. The annuity pays the full advertised amount over 30 years with 5% annual increases, typically resulting in more total money received.

Choose lump sum if: You have strong investment discipline, want immediate access, and have a qualified financial team. A well-invested lump sum can potentially outpace the annuity's guaranteed returns.

Choose annuity if: You want protection from overspending, prefer guaranteed income, or don't want to manage a large investment portfolio. The annuity acts as a built-in spending governor.

Nine states have no state income tax at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you live in one of these states, you'll only pay federal taxes on lottery winnings.

Additionally, California does not tax state lottery winnings despite having a high state income tax (up to 13.3% on other income). This makes California one of the best states to win the lottery, along with the no-income-tax states.

On the other hand, New York has the highest combined lottery tax burden — with 10.9% state tax plus an additional 3.876% New York City tax if you live in NYC, on top of the 37% federal rate.

Our calculator uses the latest 2026 federal tax brackets and state-specific lottery tax rates to calculate your actual take-home amount. Unlike simple calculators that just subtract a flat percentage, we apply the progressive federal tax system — calculating tax at each bracket level — just like the IRS does.

We fetch live jackpot data from official lottery sources multiple times daily, ensuring you're always seeing current numbers. When you select a state, we apply that state's specific lottery tax rate, including local taxes where applicable (such as NYC's additional city tax for New York residents).

For the annuity option, we model the full 30-year payment schedule with the standard 5% annual increase, calculating taxes on each individual payment. All calculations run entirely in your browser — no data is sent to our servers.

For a $1 billion Powerball or Mega Millions jackpot, here's what you'd expect for each option:

Lump Sum: The cash value would be approximately $500 million. After 37% federal tax (~$185M) and state taxes (0-10.9%), your take-home would range from about $260 million (in a high-tax state like New York) to $315 million(in a no-tax state like Florida or Texas).

Annuity: You'd receive the full $1 billion over 30 years with increasing annual payments. After taxes on each payment, your total take-home over 30 years would be approximately $520-$630 million depending on your state — nearly double the lump sum take-home.

Use our calculator above to see the exact breakdown for your specific state.