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Lottery Tax Calculator

Created by Tibor Pál, PhD candidate
Reviewed by Dominik Czernia, PhD and Jack Bowater
Based on research by
Cipra T. Financial and Insurance Formulas; 2006See 1 more source
taxfoundation.org;
Last updated: Mar 06, 2024


The lottery tax calculator (or taxes on lottery winnings calculator) helps you estimate the tax amount deducted from a lottery prize and compare the money you would receive if you took either the lump sum cash option or a series of annuity payments.

Therefore you may employ our tool as a:

  • Federal lottery tax calculator;
  • Lottery annuity tax calculator; and
  • Lottery lump sum tax calculator.

Read further, and we will show the difference between lump sum vs. annuity lottery from a tax perspective and explain how are lottery annuities taxed.

If you are interested in lottery annuity payments in the U.S., you may check our Powerball and Mega Millions payout calculators.

How to use the lottery tax calculator

If you've had the good fortune of a lottery win, our lottery tax calculator can help you understand the tax implications. Here's how to make the most of this tool:

  1. Input annuity payout: Begin by entering the total annuity payout amount you've won in the lottery.

  2. Determine lump sum payout: If you opt for a lump sum, specify the percentage of the total annuity value you will receive upfront.

  3. Select tax treatment: Choose the appropriate tax treatment based on your situation. This could be the default US taxes (steps 4 and 5) or customizable tax rates, depending on the options provided.

  4. Set your Federal filing status: Select your federal filing status, such as single, married, filing jointly, or head of household, which will affect the federal tax calculation.

    Check which tax bracket you are in with our tax bracket calculator.

  5. Choose your state: Indicate the state where you reside, as state tax rates can vary significantly from one state to another.

  6. View results and annuity schedule: The calculator will display both the gross payout and the net payout after federal and state taxes are deducted.

    It will also show an annuity schedule if you choose to receive your winnings as an annuity, detailing the gross payment, taxes deducted, and net payment for each year.

This calculator can also perform reverse calculations:

  • If you know the net payout and the taxes applied, you can work backward to find out the gross payout.
  • You can adjust the lump sum payout percentage to see how different options affect your taxes and net income.

For example, on a $100,000,000 annuity payout with a 52% lump sum option, the calculator shows a lump sum payout of $52,000,000. If you're a single filer living in Arizona, it calculates Federal taxes at around $19,200,332 and state taxes at $2,600,000, leaving you with a net payout of approximately $30,199,668.

Whether you're considering taking a lump sum or annuity payments, this tool will help you plan for your new financial landscape, taking into account the complexities of lottery winnings and tax treatments.

How much is lottery tax? Tax on lump sum vs. annuity lottery

While the same type of taxes are levied on lump sum and annuity payouts, the final amounts you may receive can diverge considerably. First of all, the lump sum payment is typically lower than the advertised lottery prize (usually by around 52 percent) and is subject to an automatic 24 percent federal withholding tax.

The remainder of the amount is also reduced by the additional Federal tax (up to 37 percent) depending on your filing status, lottery purchase, and place of residence.

In the case of lottery annuity payments, the same taxes are levied; however, they are paid annually and are always based on the actual tax rates of the given year.

Behind the scenes of the lottery tax calculator

I'm Tibor, a PhD in statistical methods in economics, and the architect of the lottery tax calculator.

The inspiration for this calculator stemmed from my keen interest in finance, leading to the creation of a tool that demystifies the tax obligations associated with lottery winnings. Recognizing the complexities winners face, I aimed to facilitate informed decision-making regarding payout options and tax liabilities.

My extensive knowledge has been instrumental in ensuring the calculator accommodates various tax scenarios, from federal to state-specific considerations. It serves as a reliable resource for winners to forecast their net earnings and plan accordingly.

Trust in the lottery tax calculator comes from our rigorous standard of accuracy and my financial acumen. The tool undergoes regular updates to reflect the latest tax codes and is verified for precision, providing users with confidence in their financial planning post-lottery win.

FAQ

What are the lump sum lottery winnings after taxes?

The federal tax on the lottery is determined by the federal marginal rates, which is 37 percent in the highest bracket. In practice, there is a 24 percent federal withholding of the gross prize, plus the remaining tax, based on your filing status.

For example, if your gross prize is $1,000,000, you need to pay $334,072 in total taxes ($240,000 federal withholding, plus the remaining $94,072 for single filing status in 2021).

How do I calculate lottery lump sum after taxes?

To find lump sum lottery winnings after taxes:

  1. Check how much the lump sum payout differs from the advertised lottery prize (around 52 percent in most cases).
  2. The gross amount is subject to a 24 percent federal withholding.
  3. Additional federal tax is imposed according to your filling status.
  4. In most cases, state taxes are also levied depending on where you bought the lottery and where you live.
  5. Use the lottery tax calculator by state for more precise results.

How much do I pay in taxes if I win 1,000,000?

If your gross prize for lump sum payout is $1,000,000, you need to pay $334,072 in total tax ($240,000 federal withholding, plus the remaining $94,072 for single filing status in 2021).

In addition, you need to pay state tax as well, depending on where you bought the lottery and where you live.

Do you pay taxes on lump sum lottery winnings?

Yes. Lump-sum lottery winnings are subject to federal taxation and, in most cases, state tax as well. The exceptions are Florida, New Hampshire, Tennessee, Texas, South Dakota, Washington, and Wyoming.

Lottery tax calculator disclaimer

You should consider this after tax lottery calculator as a model for financial approximation. All payment figures, balances, and tax figures are estimates based on the data you provided in the specifications that are, despite our best effort, not exhaustive.

Without claiming completeness, please also note the following:

  • The federal taxes approximated based on the 2021 marginal tax tables published by the IRS without taking account of possible deductions;
  • All state taxes are estimated with fixed-rate calculation applicable in 2021 (without the effect of filing status, the possible existence of graduated-rate brackets, or modification in rates);
  • Potential additional local taxes are not considered;
  • If you are not a U.S. resident, you will typically have a flat 30% federal withholding, and state taxes may differ from what is listed above.

For this reason, we created the calculator for instructional purposes only. Still, if you experience a relevant drawback or encounter any inaccuracy, we are always pleased to receive useful feedback and advice.

Tibor Pál, PhD candidate
Annuity payout
$
Lump sum payout percentage
%
Lump sum payout
$
Tax treatment
US taxes
Federal filing status
Single
Where do you live?
Arizona
Results
Lump sum payoutAnnuity payoutDifference
Gross payout*$52,000,000$100,000,000$48,000,000
Federal tax$19,200,332$35,809,960$16,609,628
State tax$2,600,000$5,000,000$2,400,000
Net payout$30,199,668$59,190,040$28,990,372
* The gross lump sum payout percentage is approximated by 52% - you can change it in the specifications.
Annuity schedule
YearGross paymentFederal taxState taxNet payout
11,505,144517,23575,257912,651
21,580,401545,08079,020956,300
31,659,421574,31882,9711,002,132
41,742,392605,01787,1201,050,255
51,829,511637,25191,4761,100,785
61,920,987671,09796,0491,153,840
72,017,036706,635100,8521,209,549
82,117,888743,951105,8941,268,043
92,223,782783,132111,1891,329,462
102,334,972824,271116,7491,393,952
112,451,720867,468122,5861,461,666
122,574,306912,825128,7151,532,766
132,703,022960,450135,1511,607,420
142,838,1731,010,456141,9091,685,808
152,980,0811,062,962149,0041,768,115
163,129,0851,118,094156,4541,854,537
173,285,5401,175,982164,2771,945,281
183,449,8171,236,764172,4912,040,562
193,622,3071,300,586181,1152,140,606
203,803,4231,367,598190,1712,245,653
213,993,5941,437,962199,6802,355,952
224,193,2741,511,843209,6642,471,767
234,402,9371,589,419220,1472,593,372
244,623,0841,670,873231,1542,721,057
254,854,2381,756,400242,7122,855,126
265,096,9501,846,204254,8482,995,899
275,351,7981,940,497267,5903,143,711
285,619,3882,039,505280,9693,298,913
295,900,3572,143,464295,0183,461,875
306,195,3752,252,621309,7693,632,985
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