What you keep after lottery taxes
Lottery winnings are taxable income. A rough estimate of take-home is winnings − federal tax − state tax. On $1,000,000 with 24% federal withholding and no state tax, federal tax is $240,000, leaving about $760,000. But 24% is only the upfront withholding — large prizes are usually taxed at the top federal rate of 37%, so you may owe more at filing time.
How to use this calculator
Enter your winnings, a federal rate (24% is the standard withholding; use 37% to model the top bracket on a large prize), and your state rate. The result estimates federal and state tax and your take-home. Set state to 0 for states with no lottery tax.
Federal withholding vs. what you actually owe
The IRS withholds 24% from large winnings immediately, but that's not your final bill. A jackpot pushes you into the top 37% federal bracket, so you typically owe the difference when you file. Model the realistic case by entering 37% in the federal field. Working out any single bracket's share is straightforward in the percentage calculator.
State tax varies a lot
State lottery tax ranges from 0% to over 10%. States like Florida, Texas, Tennessee and Washington take nothing; New York taxes winnings around 10.9% (plus city tax in NYC). Enter your state's rate to localize the estimate — here are a few examples on $1,000,000 at 24% federal:
| State rate | State tax | Take-home |
|---|---|---|
| 0% | $0 | $760,000 |
| 5% | $50,000 | $710,000 |
| 8% | $80,000 | $680,000 |
| 10.9% | $109,000 | $651,000 |
Lump sum vs. annuity
The advertised jackpot is the annuity total paid over 30 years. The lump sum (cash value) is smaller — often around 50–60% of the headline figure — and is taxed in the year received. To compare the payout structures, see the lottery annuity calculator and Powerball annuity calculator. This tool is an estimate for general information only, not tax advice — consult a professional for your situation.
Frequently asked questions
- How much tax do you pay on lottery winnings?
- The IRS withholds 24% upfront, but large prizes are taxed at the top federal rate of 37%, plus state tax of 0–10.9% depending on where you live.
- What is the federal tax on $1,000,000 in winnings?
- At the 24% withholding rate, $240,000 is withheld. At the 37% top bracket you'd owe about $370,000 in federal tax before state taxes.
- Which states don't tax lottery winnings?
- States with no lottery income tax include Florida, Texas, Tennessee, Washington, South Dakota, Wyoming and a few others. Set the state rate to 0 for these.
- Is the 24% withholding the final tax?
- No. It's an upfront withholding. Big jackpots fall in the 37% bracket, so you generally owe the difference when filing your return.
- Are lump sum and annuity taxed differently?
- The lump sum is taxed all at once in the year you receive it. Annuity payments are taxed each year as you receive them, which can keep more income in lower brackets over time.