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Best and Worst States to Pay Taxes on Lottery Winnings

Some states are far kinder to lottery winners than others

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Voltaire once referred to optimism as a form of madness, and he might not have been far off when it comes to playing the lottery. The odds against anyone winning the Powerball lottery are one in about 292 million, and Mega Millions is even worse: one in about 303 million. and yet, week after week, someone always does, and they’ll have to pay taxes on their lottery winnings.

How Much Do You Really Get?

Brace yourself for a bit of reality if that very lucky someone turns out to be you. First, you’re not going to receive the whole walloping amount that’s advertised if you take money in a lump sum. That’s reserved for those who take their winnings as annuities, and it’s paid out over a span of years. The advertised jackpot is the most you can win if you’re the patient sort and collect your winnings over time.

The Tax Man Cometh

Next, know that the tax man will come. Uncle Sam is going to want a piece of your prize, and most people can expect that their state taxing authority will have its hand out for a share also. Some states are much kinder than others when it comes to lottery taxes, however.

All told, there’s a significant disparity, and you might want to consider using some of that money to pull up stakes and relocate if you live in one of the worst states for lottery taxes—at least, if you’re planning on playing the lottery again and you’re mad enough to believe you can win big twice.

Federal Laws for Winnings

You’ll have to deal with the federal government right off the top, before your state even gets involved. The Internal Revenue Service requires that lottery officials must withhold taxes from your winnings at the rate of 24% if you win $5,000 or more after subtracting the cost of your ticket.  

This doesn’t necessarily mean you’ll owe 24% when all is said and done, however. You’re still entitled to claim every possible deduction you can possibly qualify for when you prepare your tax return at year’s end. The IRS treats that 24% withholding just the same as it would if your employer withheld taxes from your paychecks. It will send you a refund if you don’t end up owing that much.

You’ll have to dig into those winnings a little more to pay additional taxes if you end up owing more than 24%—and that’s probable, given the tax bracket that a really significant jackpot would push you into.

What Taxes Are Withheld?

FICA taxes—Social Security and Medicare—are employment taxes. They’re imposed on earned income, so you’ll dodge a bullet here. Lottery winnings are exempt because they’re not earned income. That 3.8% net investment income tax doesn’t apply to lottery winnings either.

But your winnings are unearned income, so you’ll have to pay income tax on the money at the federal level and often at the state level as well. This shines a spotlight on tax brackets and tax rates because this is how much you’ll end up paying on what’s left of your winnings after you’ve taken all possible deductions from your overall income.

The top federal tax bracket as of 2020 is 37% on total incomes over $518,400 for single taxpayers, or $622,050 if you’re married and filing a joint return.  

Plan on paying income tax at this rate on the portion of your winnings that exceed these amounts—in other words, on $418,600 if your total income including winnings is $1 million after taking deductions.

If You Live in NYC

Obviously, states with the highest top income tax rates pose the toughest tax burden, and of these, New York takes top prize as being the absolute worst—at least if you live in Yonkers or New York City. The city will want its own cut of your winnings as well. New York’s top state tax rate is 8.82% as of 2020, but then you’ll have to add another percentage for the local tax. That works out to a hefty 12.7% of your winnings.  

Your tax bill would come out to almost $127,000 on $1 million in winnings, and about $12.7 million if you won a $100 million lottery. But the state actually falls to fourth place overall if you live elsewhere in New York and don’t have to pay local income taxes.

The Worst States for Lottery Taxes

Among all states, New Jersey comes in first with a 10.76% top tax rate as of 2020, and Minnesota takes second place at 9.85%. Then comes the District of Columbia at 8.95%, then New York, then Vermont at 8.75%.

Rounding out the list of the 10 states with significantly high tax rates are:

  • Iowa: 8.53%
  • Wisconsin: 7.65%
  • Oregon: 7.6%
  • Maine: 7.15%
  • South Carolina: 7.0%  

The hit you’ll take depends on the exact threshold where these top tax rates kick in and on how much you’ve won. For example, you’d only have to pay 7.6% in Oregon if you won more than $1 million. You’d pay just 6.6% if you won $999,999. And to be fair, you’d only pay that higher rate on the portion of your winnings and total income over $1 million.  

All this assumes that your state participates in a national lottery and that it taxes lottery winnings. For example, Hawaii’s top rate is a hefty 11%, but you can’t play Powerball here. It’s one of six states that don’t participate and it’s a very long swim to the mainland to purchase a lottery ticket elsewhere.

Other states that don’t participate in Powerball are Alabama, Alaska, Mississippi, Nevada, and Utah.

The Kindest States for Lottery Taxes

OK, let’s get to the good news. Obviously, your best bet for lottery taxes is one of the states that doesn’t have an income tax at all as of 2020: Florida, South Dakota, Texas, Washington, and Wyoming. Alaska and Nevada don’t tax income, either, but they don’t participate in national lotteries.

Then there are an additional handful of states that kindly refrain from taxing lottery winnings. California and Delaware will generously let you keep your jackpot tax-free.   This is particularly convenient in California where the top tax rate is even worse than what you’d pay in New York City: 13.30% as of 2020.

That leaves us with the states with the lowest top tax rates as of 2020:

  • Tennessee: 1%
  • North Dakota: 2.90%
  • Pennsylvania: 3.07%
  • Indiana: 3.23%
  • Michigan: 4.25%
  • Arizona: 4.50%
  • Colorado: 4.63%
  • Ohio: 4.8%
  • New Mexico: 4.90%
  • Illinois and Utah: 4.95%

Three others states just narrowly miss making the list with top tax rates of 5%: Kentucky, Massachusetts, and Mississippi.  

Tennessee and New Hampshire tax only interest and dividend income, and Tennessee is repealing even that tax beginning in 2021.

State Lotteries and Other Games Are Different

Keep in mind that these rankings are for national lottery winnings. As a general rule, other types of winnings are considered income, but they’re not always subject to the withholding rule, and they might not be subject to FICA taxes. This doesn’t mean you won’t have to pay any income tax on the money, however.

The IRS doesn’t demand mandatory withholding from state lottery winnings, and it taxes other games of chance differently as well.

Some Small Tax Perks

You can deduct gambling losses if you itemize and if you spend more trying to win than you actually end up winning, but only up to the amount of your winnings. In other words, you wouldn’t have to pay a tax on your prize money, but you couldn’t use the balance of your losses to offset your other income.  

Another deduction you can take on your federal return to try to nip away at your tax bill is for the income taxes you must pay to your state on your winnings. This helps, but not by much. The Tax Cuts and Jobs Act limits this itemized deduction to $10,000 for tax years 2018 through 2025, and to just $5,000 if you’re married and file a separate return. $10,000 is just a drop in the bucket if your winnings are really significant.  

But you’ll want to claim it anyway. At least you can get something in return for income taxes you might owe to your state.

Not all states tax lottery winnings, but some that do impose pretty significant top tax rates. Where does your state stand?

Taxes On Lottery Winnings by State 2020

There’s no doubt that winning the lottery is exciting and can significantly help the winner financially; however, the winner must not be too quick to spend all of his or her winnings. Like other income in the United States, the IRS taxes lottery winnings.

Lottery winnings are considered ordinary taxable income for both federal and state tax purposes. Winnings are taxed the same as wages or salaries are, and the total amount the winner receives must be reported on their tax return each year. Before the winner receives any of the money, however, the IRS automatically takes 24% of the winnings. The rest of the winnings are expected to be paid by the winner when filing the return.

What is the tax rate for lottery winnings? For federal taxes, lottery winnings are taxed according to the federal tax brackets. Federal tax brackets are progressive, so portions of the winnings are taxed at different rates, and could be as high as 37%. State income taxes vary by location. Some states do not have a state income tax, while others may withhold up to 8.82%.

The states that do not levy an individual income tax are:

Six states do not have a lottery: Alabama, Alaska, Hawaii, Mississippi, Nevada, and Utah. Two states, California and Delaware, do have a lottery but do not tax winnings.

If the winner buys a winning ticket in a state that they do not live in, most states will not withhold the winnings. Out of the 43 states that participate in multistate lotteries, only Arizona and Maryland tax the winnings of people who live out of state.

Here are the 10 states with the highest taxes on lottery winnings:

  1. New York (8.82%)
  2. Maryland (8.75%)
  3. New Jersey (8.00%)
  4. Oregon (8.00%)
  5. Wisconsin (7.65%)
  6. Minnesota (7.25%)
  7. Arkansas (7.00%)
  8. South Carolina (7.00%)
  9. Connecticut (6.99%)
  10. Idaho (6.92%)

Taxes On Lottery Winnings by State 2020 There’s no doubt that winning the lottery is exciting and can significantly help the winner financially; however, the winner must not be too quick to spend

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All you need to know about Lotto

THE ONE. THE ONLY. THE ORIGINAL.

Saturday nights changed forever when Lotto was introduced back in 1994. Since then, it’s become the nation’s favourite game – played by millions in towns and cities across the country. Today, it’s as popular as ever, with thousands winning prizes in every game. As far as lotteries go, Lotto is the real McCoy.

So how do you play?

Pick 6 numbers from 1–59 or go with a Lucky Dip ® for randomly selected numbers.

You can play up to 7 lines of numbers on each play slip and buy up to 10 slips at a time.

Choose to play on Wednesday or Saturday – or both, and then the number of weeks you’d like to play.

You’re good to go!

You can buy Lotto tickets online every day from 6am until 11pm. But remember, to play on a draw day, you’ll need to buy your ticket before 7.30pm.

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Look out for those rolldowns

Lotto can only Rollover 5 times. The 5th Rollover is a Must Be Won draw.

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Jackpot Rolldown –>

In a Lotto Must Be Won draw where no one wins the jackpot by matching 6 main numbers, there’s a Rolldown. This means the jackpot is shared by players matching 2 or more main numbers, so thousands can expect to win a boosted cash prize! [1]

Lotto Rolldown enhancements are effective from the 7th November draw. See more information on these changes. [1]If the jackpot is not won in a Must Be Won draw, match 2 winners will each receive £5 in addition to their Lotto Lucky Dip. The remaining jackpot will be allocated to all other winning prize tiers in set percentages. More information about Rolldowns are included in the Lotto Game Procedures

Different ways to check results

Check on the go

Use our App on your mobile to see if you’ve won. You can also scan paper tickets for instant results. Get it on Google Play or the App Store.

Here on the web

All results are published here on the website every Wednesday and Saturday from around 9.30pm.

Watch the draw live

Watch all Lotto draws first on our website or YouTube channel at 8pm every Wednesday and 7.45pm every Saturday.

Want to know more?

What are the average jackpots, compared with the previous game?

Base jackpots on Lotto are £2 million on a Wednesday (up from £1.8 million previously) and £3.8 million on a Saturday (up from £3.1 million previously).

The jackpot grows as it rolls, and we expect Must-Be-Won draws to be around £11 million on a Wednesday and £12 million on a Saturday.

As the jackpot is now only allowed to roll five times under the new format (compared with the previous rules where it rolled up to £22 million), the jackpot will be won more often.

How does a Rolldown work?

Lotto Rolldown enhancements are effective from the 7th November draw. Find out more.

Whenever there’s a Lotto Must Be Won draw and no one wins the jackpot by matching 6 main numbers, there’s a Rolldown. This means the jackpot is shared across other prize tiers where players match 2 or more main numbers, so thousands can expect to win a boosted cash prize.

Players matching 2 main numbers in a Rolldown will each receive a £5 cash prize in addition to their usual free Lucky Dip ® . The remaining jackpot prize fund will then be allocated (in set percentages) to the other winning prize tiers and shared amongst those winners.

For details of the Rolldown mechanic, see the Lotto Game Procedures.

What are the odds?

The odds remain the same as they were previously, but the jackpot will be won more often because it is now only allowed to roll over five times (previously it rolled up to £22 million).

Why did you not change the price or number of balls?

Sales of the old £1, ‘6 from 49’ game had been falling for a long time. As a result, so had the amount of money it was raising for Good Causes, which is ultimately what we’re here for.

Secondly, in 2015, we didn’t just add 10 extra balls – there were a number of other changes (for example, the ‘Millionaire Raffle’ and a free Lotto Lucky Dip® ticket for matching two main numbers). If we make a change to one part of the game, we have to consider the knock-on effects that would happen in other parts of the game. We need to look at the game in its entirety.

We’ve listened to what people (players, non-players and retailers) have told us and what they want from Lotto in the future – jackpots that will be won more often, with bigger cash prizes at the other levels. We believe that the improvements we’ve made will do just that.

Where has the money from the raffle gone?

All of the money has gone into the main draw.

We’ve listened to feedback and responded by taking Lotto back to its roots: focusing on the main draw and bigger, fixed prizes – so players will know exactly what they will win.

In addition, the jackpot will be won more often, the prize fund will be more fairly shared across all levels and we’ve added a new £1 million prize for matching 5+Bonus Ball (up from around £50,000 previously).

Have these changes impacted Lotto HotPicks?

There have been no changes to Lotto HotPicks prizes as a result of these changes – the new prize amounts apply to Lotto only.

The only change is that you can now only play Lotto HotPicks 4 weeks in advance.

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    Find out all you need to know about playing the nation's favourite lottery game, Lotto.

    Mega Millions Cutoff Time: How Late Can You Buy Lottery Tickets Before Friday’s $1 Billion Drawing?

    With a little, or a lot, of luck, someone will be crowned the big winner of the Mega Millions lottery and the $1 billion jackpot. As the drawing nears, it’s natural for people to rush to buy tickets, but there is a cutoff time for people taking their shot at becoming wealthy beyond their imagination.

    In many states, eligible tickets are sold until 15 minutes before the drawing takes place. The drawing for Mega Millions will occur at 11 p.m. EDT on Friday, so, if you live in an eligible state on the East Coast, you have to purchase your ticket by 10:45 p.m EDT. If you’re in Central Time Zone, that means 9:45 p.m. CDT. The West Coast should have their tickets in hand by 7:45 p.m PDT.

    However, there are exceptions to this time limit, so it’s best to check the rules in your own state. For example, in Maine, New Hampshire, Vermont, the cutoff is 9:50 p.m. EDT on the day of the drawing.

    After a series of drawings during which no one hit big, the Mega Millions reached a whopping $1 billion with a cash option of $565 million on Friday. The massive prize is the second-largest pot of cash in United States lottery history.

    To take a shot at winning the life-changing prize money, a person over the age of 18 needs to purchase a ticket for two dollars with the option to guess the Megaplier for an extra dollar. Tickets are sold at a variety of establishments, including convenience stores, gas stations and newspaper stands.

    There are two ways a person can select their numbers, either by choosing specific numbers or through random selection. If there is a set of lucky numbers the person wants to play, they select five different numbers ranging from one to 70 and one number ranging from one to 25. If the person wants to leave it up to the computer to decide their fate, they can select the Easy Pick/Quick Pick option and have numbers generated for them.

    There are nine ways a person can win the Mega Million lottery, ranging from the top prize down to the cost of their ticket:

    • 5 numbers + gold Mega Ball match = Jackpot
    • 5 numbers + no gold Mega Ball match = $1,000,000
    • 4 numbers + gold Mega Ball match = $10,000
    • 4 numbers + no gold Mega Ball match = $500
    • 3 numbers + gold Mega Ball match = $200
    • 3 numbers + no gold Mega Ball match = $10
    • 2 numbers + gold ball match = $10
    • 1 number + gold ball match = $4
    • 0 numbers + gold ball match = $2

    Winners have two choices for claiming their prize, either in an immediate payment followed by 29 subsequent payments, or in one lump sum of cash.

    While not as high as the Mega Millions prize, also on the line this weekend is the $470 million prize attached to the Power Ball. The drawing for the Power Ball will take place on Saturday evening.

    The $1 billion drawing has a cash payout option of more than $500 million.

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    sagittarius lotto numbers for today

    Sagittarius Winning Numbers Horoscope

    Sagittarius

    The Lucky Numbers Horoscope for today, November 27, 2020

    Play the numbers: 8 – 10 – 23 – 31 – 32 – 35

    Tip: It is possible to win more than once with the Lucky Numbers Tip. So, if you win once, do not stop playing the numbers. Play them again!

    The Winning Numbers Horoscope for today, November 27, 2020 . Click on your sign:

    • Aries
    • Taurus
    • Gemini
    • Cancer
    • Leo
    • Virgo
    • Libra
    • Scorpio
    • Sagittarius
    • Capricorn
    • Aquarius
    • Pisces

    Why should you trust our Winning Numbers Horoscope? Reading these few lines, you will see that you can’t live without it! Before explaining in detail what our Lucky Numbers Horoscope is, here is a short historical reference which will help you use it better. The Goddess of Fortune, the Roman equivalent of the Greek Goddess Tyche, existed in ancient times and some sustain this was before the Roman period. Our dear goddess has always had a double content but this is always positive: first of an entrepreneurial type as she always ensured businesses went along the right way; secondly of an erotic nature as even today there is still the motto, “to be kissed by Fortune”. As for Greek mythology, the Goddess Tyche, represented with her full cornucopia, according to tradition could distribute joy or pain depending on how an event was interpreted, depending on her personal sense of justice.

    With Winning Numbers Horoscope you will be able to discover in advance what Destiny has in store for you and act accordingly so you don’t miss any opportunity! Lucky Numbers Horoscope is just waiting for you to satisfy your hunger for knowledge! In the past or in the present, Lucky Numbers Horoscope cannot be renounced: everybody wants to be lucky and to know the circumstances how this beloved goddess acts bringing with her vitality and hope. Are you among these? All you need to do is consult Lucky Numbers Horoscope!

    If knowing the forecasts and movements of Fortune in advance with Winning Numbers Horoscope is not enough for you, try to also consult our section dedicated to Numerology: you will find all your lucky numbers which will be useful for finalising a successful win. It’s so easy!

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    Precious Birthstones

    Mineralogy is now a science which many trust in to discover the benefits which stones and gems can give. Did you know there is a special gemstone for every sign of the Zodiac? Read immediately what yours is with the section dedicated to the Signs Birthstones! Ruby or Emerald? Discover with a click!

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    Read your Monthly Horoscope here! Everything about love, work and health in December . Every day is a surprise but you can forecast in advance the general trend of the month of December .

    The 12 Signs of the Zodiac

    Every sign of the Zodiac is gifted with different characteristics which set it apart from the others. The 12 signs are all different and particular and are simply waiting to be discovered! Enter the section dedicated to the 12 Signs of the Zodiac: you will learn everything there is to know about the 12 Signs of the Zodiac!

    Winning Numbers

    Numerology is the study of numbers and their meanings. It is based of the concept that the name you were given when born and the day, month and year of your birth, influence your character and determine the events during your lifetime. Now you try, calculate your Winning Numbers!

    Ask the Tarot cards

    Consulted for hundreds of years to solve any type of doubt, they also have an answer for you! Are you interested in work, friendship…or is your heart beating just for love? Ask your question! The wisdom of the cards won’t disappoint you! If you really want to know everything about the future, ask the Tarots!

    Check the Winning Numbers tip for the Sagittarius sign of the zodiac every day! Read the forecast for the Sagittarius sign to make a winning lotto numbers strategy. Sagittarius, the Stars will help you win!

    Sagittarius Lucky Lottery Numbers – Today and Tomorrow

    Sagittarius Lucky Lottery Numbers

    Are you Sagittarius? Get your FREE Sagittarius lucky lottery numbers to play.
    Your Lucky Lotto Numbers for today is here, Sagittarius. We update your numbers every day.

    Sagittarius Lucky Lottery Numbers Today

    Thursday, November 26, 2020

    • 31
    • 51
    • 43
    • 8
    • 3
    • 47

    Bonus Numbers

    Sagittarius Lucky Lottery Numbers Tomorrow

    Friday, November 27, 2020

    • 40
    • 54
    • 34
    • 53
    • 46
    • 27

    Bonus Numbers

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    Sagittarius Daily Horoscope

    Find out your Sagittarius horoscope for today tomorrow and day after tomorrow. Visiting us every day, you can find the updated astrology readings for your sign.

    Sagittarius Lucky Lottery Numbers. Need some lotto number suggestions Sagittarius. Here you can find your Daily Lucky Numbers Sagittarius for Today and Tomorrow.

    Find out your lucky numbers, winning numbers for lottery, gambling, betting. Find your personal lucky numbers, or determine your lucky days! Try your fortune online with lucky numbers, lottery numbers, lotto numbers, winning numbers, numbers game, luck, lucky, luck of the draw, just my luck, fortune, fortunate. It isn’t only about winning huge pots of cash. Find Your Lucky is about making the most of the wonderful blessings already surrounding you. FindYourLucky is a tool for help you to do it every day. Lucky Numbers

    Sagittarius Lucky Lottery Numbers. Need some lotto number suggestions Sagittarius. Here you can find your Daily Lucky Numbers Sagittarius for Today and Tomorrow.