Lottery Tax Calculator — After-Tax Prize
Find out exactly what you take home from a lottery prize: enter the jackpot, choose lump sum or annuity, and set the federal and state tax rates to see the breakdown of taxes and your net winnings.
$
Payout type
%
%
%
What you actually receive after federal and state income tax
58%
yoursFederal tax
37%
State tax
5%
Net take-home
58%
- 1
Gross lump sum payout
1,000,000 × 60% = 600,000Cash option is typically ~60% of the advertised jackpot before tax. - 2
Federal income tax
600,000 × 37% = 222,000 - 3
State income tax
600,000 × 5% = 30,000 - 4
Net take-home
600,000 − 222,000 − 30,000 = 348,000
How does this calculator work?
US lottery prizes are ordinary income: top federal rate 37% + state rate (0–13%, editable). The cash option is ~60% of the advertised jackpot before tax. Net take-home = Gross × (1 − federal − state). On a $1M cash prize with 37% federal + 5% state, you keep about $580,000.
Formula
How this is calculated
Lottery winnings are treated as ordinary income in the United States and are taxed at the federal and state level. For the lump-sum (cash) option, the lottery first reduces the advertised jackpot to its present value — typically around 60% of the headline figure — before taxes are applied. For the annuity option, each annual payment is taxed as it is received. This calculator applies both rates to your selected gross payout to show the combined tax and net take-home.
The US federal top marginal rate on lottery winnings is 37% (2025), though the IRS initially withholds only 24%. The difference must be paid at tax time. State rates vary widely: some states (Florida, Texas, California for lottery prizes) levy 0%, while others such as New York charge up to 10.9%. All figures are editable so you can enter your own jurisdiction's rate or a blended estimate.
Note that this calculator uses a flat combined-rate approach for simplicity. In practice, the first portions of your income are taxed at lower bracket rates, so your actual effective rate may be slightly lower. Consult a tax professional for exact figures — lottery winnings can also trigger additional Medicare surtax, gift tax issues, and other considerations.
Frequently asked questions
Federally, winnings are taxed at your marginal rate — up to 37% (2025) for large prizes. The IRS automatically withholds 24% upfront; you owe the rest at filing. State tax adds another 0–10.9% depending on where you live. On a $1 million lump-sum prize, the combined bill is often 40–50%.
For large jackpots both options push you into the top federal bracket, so the tax rate is similar. The lump sum means paying all taxes now on a smaller (present-value) amount; the annuity spreads payments and taxes over many years, which rarely changes the bracket. The lump sum is usually preferred for investment flexibility.
For US prizes over $5,000, 24% is automatically withheld at the time of payment. If you are in a higher bracket (37% for large jackpots), you must pay the remaining tax when you file your return. State withholding varies — some states withhold at source, others require you to pay upon filing.
Also known as
TG we-Calculate Editorial Team. (2026). Lottery Tax Calculator — After-Tax Prize [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/lottery-tax-calculator
TG we-Calculate Editorial Team. "Lottery Tax Calculator — After-Tax Prize." TG we-Calculate. 2026. https://we-calculate.com/calculator/lottery-tax-calculator.
TG we-Calculate Editorial Team, "Lottery Tax Calculator — After-Tax Prize," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/lottery-tax-calculator
@misc{wecalculate_lottery_tax_calculator, title = {Lottery Tax Calculator — After-Tax Prize}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/lottery-tax-calculator}}, year = {2026}, note = {TG we-Calculate} }
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