# How much is the Powerball tax?

Estimates the 2026 federal and state tax on a lottery prize (Powerball, Mega Millions or a state game), what the lottery withholds, what is left to pay when you file, and what you keep.

- Page: https://www.acalculator.org/game/lottery-tax-calculator
- JSON spec: https://www.acalculator.org/game/lottery-tax-calculator.json
- Version: ec812154f07d

## Default answer

Example with the default inputs (Prize $1,000,000.00, State Texas, Filing status Single, Other taxable income $50,000.00): A $1,000,000.00 lottery prize in Texas costs about $334,677.25 in federal tax and $0.00 in state tax; you keep $665,322.75.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| prize | Prize | The prize you receive this year, before tax (for a jackpot, the cash option or one annuity payment). |
| state | State | The state where you live and bought the ticket. |
| status | Filing status | Your federal filing status. |
| income | Other taxable income | Your other taxable income this year before deductions: wages, pensions, interest. |
| rate | Your state tax rate | A state and local tax rate on the prize to use instead of the state’s top rate (for example with a city tax). |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| net | You keep | The prize minus the estimated federal and state tax on it. |
| federalTax | Federal tax on the prize | Your 2026 federal tax with the prize minus your federal tax without it. |
| federalWithheld | Federal tax withheld | 24% of a prize over $5,000, withheld when you claim it. |
| stateTax | State tax on the prize | The prize times the state’s top income tax rate, or your rate. |
| stateWithheld | State tax withheld | What the state lottery withholds for state income tax. |
| dueAtFiling | Still to pay when you file | Federal and state tax on the prize minus what was withheld, when the tax is more. |
| refund | Refund when you file | What was withheld minus the federal and state tax on the prize, when more was withheld. |
| paidOut | Paid to you at claim | The prize minus federal and state withholding. |
| effectiveRate | Share of the prize in tax | Federal and state tax on the prize divided by the prize. |
| stateNote | About this state | A note on the state’s lottery tax rules. |

## Method

Federal tax = 2026 tax on (other income + prize) − tax on other income; withheld = 24% of a prize over $5,000; state tax = prize × state top rate (or yours); state withholding from each lottery’s rules.

## Assumptions

- Federal tax for tax year 2026 with the standard deduction and the regular brackets; the prize is ordinary income, with no itemized deductions or gambling losses.
- State tax uses the state’s top income tax rate, which most of a large prize pays; a small prize can pay less. California does not tax California Lottery prizes; states without an income tax take nothing.
- Local taxes (New York City, Yonkers, Maryland counties, some Ohio cities) are not included; enter your combined rate to include them.
- State withholding is shown where the state lottery or revenue department confirms the rate (read 2026-09-29).
- Buying a ticket in another state can mean tax in both states, with a credit at home; this page uses one state.
- Estimates only, not tax advice. If gambling is causing problems for you or someone you know, call or text 1-800-MY-RESET.

## Worked examples

1. prize = $1,000,000.00, state = TX, status = single, income = $50,000.00 gives federalWithheld = $240,000.00, stateTax = $0.00, stateWithheld = $0.00, federalTax = $334,677.25, net = $665,322.75, dueAtFiling = $94,677.25. Source: IRS Instructions for Forms W-2G (24% over $5,000); 2026 single brackets (Rev. Proc. 2025-32).
2. prize = $10,000.00, state = IL, status = mfj, income = $80,000.00 gives federalWithheld = $2,400.00, stateWithheld = $495.00, stateTax = $495.00, federalTax = $1,200.00.
3. prize = $600,000.00, state = NJ, status = single, income = $0.00 gives stateWithheld = $48,000.00, stateTax = $64,500.00, federalWithheld = $144,000.00, federalTax = $173,134.25.
4. prize = $5,000.00, state = CA, status = single, income = $40,000.00 gives federalWithheld = $0.00, stateWithheld = $0.00, stateTax = $0.00, federalTax = $600.00. Source: IRS W-2G instructions (no withholding at $5,000 or less).

## FAQ

### How much tax is taken out of lottery winnings?

For a prize over $5,000, the lottery withholds 24% for federal income tax (IRS Instructions for Form W-2G), and most states withhold their own tax too. On a large prize the federal tax actually due is higher, because most of it falls in the 37% bracket; you pay the difference when you file.

### Which states do not tax lottery winnings?

States with no income tax take nothing: Florida, Tennessee, Texas, Washington and Wyoming, plus South Dakota and New Hampshire, which do not tax lottery prizes. California does not tax California Lottery prizes. Delaware withholds nothing but does tax prizes.

### What is the Powerball tax in my state?

Pick your state to see its lottery withholding and the tax rate used. Examples of withholding on large prizes, read on 2026-09-29: Maryland 9.5% for residents, DC 8.5%, New Jersey 8% over $500,000, Oregon 8%, Arizona 2.5%, North Dakota 2.5%.

### Why is the withholding less than the tax I owe?

Federal withholding is a flat 24%, but the top rate is 37%. State withholding can also be below the state’s top rate (Colorado withholds 4% against a 4.4% rate). The page shows what is still due when you file.

### Is gambling a way to make money?

No. Lotteries pay out less than they take in, and the chance of winning a jackpot is tiny. If gambling is causing problems for you or someone you know, call or text the National Problem Gambling Helpline at 1-800-MY-RESET.

## Sources

- Internal Revenue Service, Instructions for Forms W-2G and 5754 (Rev. January 2026): 24% withholding from lottery proceeds over $5,000: https://www.irs.gov/instructions/iw2g
- Internal Revenue Service, Rev. Proc. 2025-32 (2026 brackets and standard deduction): https://www.irs.gov/irb/2025-45_IRB
- Internal Revenue Service, Topic no. 419, Gambling income and losses: https://www.irs.gov/taxtopics/tc419
- State lottery and revenue departments, withholding rules read 2026-09-29, for example: New Jersey Lottery, https://www.njlottery.com/en-us/playertools/claimprize.html; Comptroller of Maryland, https://www.marylandcomptroller.gov/legal-library/ta-01-jul-2025.html; Illinois Department of Revenue Pub-130, https://tax.illinois.gov/research/publications/pubs/who-is-required-to-withhold-illinois-income-tax/withholding-illinois-income-tax-for-lottery-or-gambling-winnings.html
- California Franchise Tax Board, Gambling (California Lottery winnings are not taxed): https://www.ftb.ca.gov/file/personal/income-types/gambling.html
- National Council on Problem Gambling, help and treatment (1-800-MY-RESET): https://www.ncpgambling.org/help-treatment/