TaxWrenLottery taxes by prize size
Single filer in Texas (no state income tax) with $60,000 of other income, 2026:
| Prize | Withheld at payout | Federal tax | Owed at filing | You keep |
|---|---|---|---|---|
| $1,000 | $0 | $120 | $120 | $880 |
| $10,000 | $2,400 | $1,550 | $850 refund | $8,450 |
| $100,000 | $24,000 | $22,114 | $1,886 refund | $77,886 |
| $1,000,000 | $240,000 | $337,180 | $97,181 | $662,820 |
| $10,000,000 | $2,400,000 | $3,667,180 | $1,267,181 | $6,332,820 |
| $100,000,000 | $24,000,000 | $36,967,180 | $12,967,181 | $63,032,820 |
Small prizes have no withholding, so the whole tax is due when you file. For prizes in the millions the 24% withheld covers well under the 37% top rate; set money aside, or make an estimated tax payment to avoid an underpayment penalty.
How lottery winnings are taxed
- Ordinary income: the prize is added to your other income for the year and taxed at your federal brackets. It is reported on Schedule 1 of Form 1040, not as a capital gain.
- Withholding: 24% of the winnings minus the ticket cost when that exceeds $5,000. It is a prepayment; the real tax is figured on your return.
- Form W-2G: the lottery reports prizes of at least $2,000 that are at least 300 times the wager (2026 threshold). Smaller prizes are still taxable.
- Non-cash prizes such as cars or trips are taxed at their fair market value.
- Losses: Gambling losses are deductible only if you itemize, and only up to the gambling winnings you report.
Lump sum or annuity
If, within 60 days after becoming entitled to the prize, the winner chooses an annuity payable over at least 10 years, winnings are taxed when actually paid, and a Form W-2G is filed each year for the payments made that year. Taking the annuity spreads the income over many years, so each payment is taxed at the rates of the year it is paid. Use the calculator with one year's payment to see the tax on it, and the lump-sum cash value to compare.
State tax on a $1,000,000 lottery prize
State income tax on a $1,000,000 prize for a single filer with $60,000 of other income, ticket bought in the home state, 2026. Rates and brackets as in our income tax calculator; city taxes and state withholding are not included.
| State | State tax | Federal + state | You keep |
|---|---|---|---|
| Alaska | $0 | $337,180 | $662,820 |
| California (own lottery exempt) | $0 | $337,180 | $662,820 |
| Florida | $0 | $337,180 | $662,820 |
| Nevada | $0 | $337,180 | $662,820 |
| New Hampshire | $0 | $337,180 | $662,820 |
| South Dakota | $0 | $337,180 | $662,820 |
| Tennessee | $0 | $337,180 | $662,820 |
| Texas | $0 | $337,180 | $662,820 |
| Washington | $0 | $337,180 | $662,820 |
| Wyoming | $0 | $337,180 | $662,820 |
| North Dakota | $23,806 | $360,986 | $639,014 |
| Arizona | $25,000 | $362,180 | $637,820 |
| Ohio | $27,559 | $364,739 | $635,261 |
| Indiana | $29,500 | $366,680 | $633,320 |
| Louisiana | $30,000 | $367,180 | $632,820 |
| Pennsylvania | $30,700 | $367,880 | $632,120 |
| Alabama | $33,141 | $370,321 | $629,679 |
| Kentucky | $35,000 | $372,180 | $627,820 |
| Arkansas | $37,287 | $374,468 | $625,532 |
| Iowa | $38,000 | $375,180 | $624,820 |
| North Carolina | $39,900 | $377,080 | $622,920 |
| Mississippi | $40,000 | $377,180 | $622,820 |
| Michigan | $42,500 | $379,680 | $620,320 |
| Colorado | $44,000 | $381,180 | $618,820 |
| Utah | $44,923 | $382,103 | $617,897 |
| Oklahoma | $45,000 | $382,180 | $617,820 |
| Nebraska | $45,500 | $382,680 | $617,320 |
| West Virginia | $45,793 | $382,973 | $617,027 |
| Missouri | $47,035 | $384,216 | $615,784 |
| Illinois | $49,645 | $386,825 | $613,175 |
| Georgia | $49,900 | $387,080 | $612,920 |
| Massachusetts | $50,000 | $387,180 | $612,820 |
| South Carolina | $52,597 | $389,778 | $610,222 |
| Idaho | $53,000 | $390,180 | $609,820 |
| Kansas | $55,800 | $392,980 | $607,020 |
| Montana | $56,466 | $393,646 | $606,354 |
| New Mexico | $57,294 | $394,474 | $605,526 |
| Virginia | $57,500 | $394,680 | $605,320 |
| Rhode Island | $57,743 | $394,923 | $605,077 |
| Maryland | $59,581 | $396,761 | $603,239 |
| Delaware | $65,966 | $403,146 | $596,854 |
| New York | $66,804 | $403,985 | $596,015 |
| Wisconsin | $70,523 | $407,703 | $592,297 |
| Connecticut | $71,727 | $408,907 | $591,093 |
| Maine | $74,098 | $411,278 | $588,722 |
| New Jersey | $79,149 | $416,329 | $583,671 |
| Vermont | $84,367 | $421,547 | $578,453 |
| District of Columbia | $93,791 | $430,971 | $569,029 |
| Minnesota | $94,651 | $431,832 | $568,168 |
| Oregon | $98,914 | $436,095 | $563,905 |
| Hawaii | $103,054 | $440,234 | $559,766 |
Alaska, California, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming don't tax the prize; Hawaii takes the most, $103,054. California does not tax California Lottery winnings (including SuperLotto, Powerball and Mega Millions bought in California); winnings from other states' lotteries are taxable. Pennsylvania taxes cash prizes from the Pennsylvania Lottery (since 2016) and other lotteries; noncash Pennsylvania Lottery prizes are exempt. A state can also tax prizes on tickets bought there by nonresidents (Pennsylvania does for Pennsylvania Lottery, Powerball and Mega Millions tickets sold in the state), so check both states' rules if you won away from home.
Sources: IRS Instructions for Forms W-2G and 5754 (Rev. January 2026); IRS Topic 419, Gambling income and losses; California Franchise Tax Board, Gambling; Pennsylvania Department of Revenue, Lottery winnings; federal brackets from IRS Rev. Proc. 2025-32. See our methodology.