Lottery Tax by State: Complete 2026 Guide
How much do you actually keep after winning the lottery? Federal tax, state tax, lump sum vs annuity — we break it down for every US state so you know exactly what to expect.
- May 14, 2026
- 11 min read
- #Powerball
- #Mega Millions
- #Tax Guide
- #Lottery Winnings
US lottery winners pay 37% federal tax on winnings above $537,900 (2026). Most states add 3%–10.9% state tax on top. A $1 billion lump sum jackpot winner in California takes home approximately $376 million after all taxes — about 37.6 cents on the dollar.
Winning the lottery is life-changing — but how much you actually keep depends heavily on where you bought the ticket. Two winners splitting a $500M jackpot can walk away with very different amounts depending on their state. This guide gives you the complete picture for 2026.
We cover federal tax rates, every state's lottery tax rate, the lump sum vs annuity decision, and how to use Lottorios to track jackpots as they grow toward record levels.
How Lottery Taxes Work in the US
Lottery winnings in the United States are treated as ordinary income by the federal government. This means they're taxed at the same rates as your salary — except that large winnings immediately push you into the highest tax bracket.
Federal Tax Brackets for Lottery Winnings (2026)
| Winnings | Federal Tax Rate | Notes |
|---|---|---|
| Up to $11,600 | 10% | Lowest bracket |
| $11,601 – $47,150 | 12% | |
| $47,151 – $100,525 | 22% | |
| $100,526 – $191,950 | 24% | |
| $191,951 – $243,725 | 32% | |
| $243,726 – $609,350 | 35% | |
| Above $609,350 | 37% | All major jackpots land here |
Any Powerball or Mega Millions jackpot winner claiming a lump sum will immediately fall into the 37% federal bracket. The lottery also withholds 24% automatically at the point of claiming — you pay the remaining 13% when you file taxes.
What You Actually Take Home: $1 Billion Example
That's 31.3 cents on the dollar · Compare: Texas winner keeps $378M (no state tax)
Best & Worst States for Lottery Winners
All 50 States Lottery Tax Rate Table (2026)
The table below shows the state income tax rate applied to lottery winnings in every US state. Federal tax of 37% applies on top in all states.
| State | State Tax Rate | Tax on $1M Win | Notes |
|---|---|---|---|
| Alabama | 5% | $50,000 | No state lottery |
| Alaska | 0% | $0 | No state lottery, no tax |
| Arizona | 2.5% | $25,000 | Low rate |
| Arkansas | 5.5% | $55,000 | |
| California | 0% | $0 | No lottery tax on winnings |
| Colorado | 4.4% | $44,000 | |
| Connecticut | 6.99% | $69,900 | |
| Delaware | 6.6% | $66,000 | |
| Florida | 0% | $0 | No state income tax |
| Georgia | 5.75% | $57,500 | |
| Idaho | 6.93% | $69,300 | |
| Illinois | 4.95% | $49,500 | |
| Indiana | 3.23% | $32,300 | Low rate |
| Iowa | 6% | $60,000 | |
| Kansas | 5.7% | $57,000 | |
| Kentucky | 5% | $50,000 | |
| Louisiana | 4.25% | $42,500 | |
| Maine | 7.15% | $71,500 | |
| Maryland | 8.95% | $89,500 | + local tax possible |
| Massachusetts | 5% | $50,000 | |
| Michigan | 4.25% | $42,500 | |
| Minnesota | 9.85% | $98,500 | One of highest |
| Mississippi | 5% | $50,000 | |
| Missouri | 4.95% | $49,500 | |
| Montana | 6.75% | $67,500 | |
| Nebraska | 6.84% | $68,400 | |
| New Hampshire | 0% | $0 | No income tax |
| New Jersey | 10.75% | $107,500 | 2nd highest |
| New Mexico | 5.9% | $59,000 | |
| New York | 10.9% | $109,000 | Highest in US |
| North Carolina | 4.75% | $47,500 | |
| North Dakota | 2.9% | $29,000 | Low rate |
| Ohio | 3.75% | $37,500 | |
| Oklahoma | 4.75% | $47,500 | |
| Oregon | 9.9% | $99,000 | |
| Pennsylvania | 3.07% | $30,700 | Low rate |
| Rhode Island | 5.99% | $59,900 | |
| South Carolina | 6.4% | $64,000 | |
| South Dakota | 0% | $0 | No state income tax |
| Tennessee | 0% | $0 | No income tax |
| Texas | 0% | $0 | No state income tax |
| Vermont | 8.75% | $87,500 | |
| Virginia | 5.75% | $57,500 | |
| Washington | 0% | $0 | No state income tax |
| Washington DC | 10.75% | $107,500 | 3rd highest |
| West Virginia | 6.5% | $65,000 | |
| Wisconsin | 7.65% | $76,500 | |
| Wyoming | 0% | $0 | No state income tax |
Lump Sum vs Annuity: Which Is Better?
Every major US lottery jackpot offers two payment options. This is one of the most important decisions a winner makes — and it has massive tax implications.
💰 Lump Sum (Cash Option)
📅 Annuity (30 Annual Payments)
Most financial advisors recommend the lump sum for winners who can invest wisely — a well-managed lump sum typically outgrows the annuity payments over 29 years. But if you have no investment experience, the annuity protects you from spending everything immediately.
What Happens When You Claim Your Prize
Track the Jackpot Before You Win
Knowing the tax rules is only part of the equation. The other part is knowing when to play. Lottorios tracks live jackpot levels in real time across Powerball, Mega Millions, EuroMillions, and EuroJackpot — so you can see exactly how large each jackpot is right now before you decide to buy a ticket.
Combine that with the hottest numbers and most overdue numbers — build a statistically sound combination and play when the prize-to-odds ratio is at its peak. Winning is always random, but the jackpot size and the tax math are not.
Frequently Asked Questions
Track the Next Big Jackpot on Lottorios
Knowing the tax is only half the picture. Lottorios tracks live jackpot levels across Powerball, Mega Millions and EuroJackpot — so you always know when the prize-to-odds ratio is at its peak.