United States · Lottery prizes · 2026 return
Lottery winnings tax calculator.
The lottery commission holds back 24% and sends it to the IRS, but a prize this size is taxed at up to 37%, so the withholding is a down payment. Enter the lump sum or the annuity and your other income to see the real federal bill.
A single filer with $60,000 of other taxable income who takes a $500,000 lump sum has $120,000 withheld but owes $156,857 in federal tax, so about $36,857 more is due at filing (state tax not included). Enter your own prize below.
Your numbers
Your result
How this is calculated
- Lottery prizes are gambling income. They go on Schedule 1 as other income, with the fair market value of any noncash prize (Pub. 525; IRS Topic 419).
- Withholding. When winnings minus the wager exceed $5,000, the payer withholds 24% of the proceeds (Instructions for Forms W-2G and 5754, 01/2026). This calculator applies 24% to the full prize and ignores the ticket cost.
- Real federal tax. The prize is stacked on top of your other taxable income and run through the 2026 brackets, which rise from 10% to 37% (Rev. Proc. 2025-32). The tax on the prize is the tax with it minus the tax without it.
- Annuity. The total is split into equal annual payments, each taxed on top of the same other income with the 2026 brackets. Brackets for later years are not published yet, so they are held at 2026 levels.
- State. The flat percentage you enter is multiplied by the prize. No state table is built in.
Worked example: single filer, $60,000 other taxable income
| Line | Lump sum | Annuity (30 payments) |
|---|---|---|
| Prize before tax | $500,000 | $900,000 |
| Amount taxed each year | $500,000 | $30,000 |
| Federal tax at 2026 brackets | $156,857 | $198,000 |
| 24% withholding | $120,000 | $216,000 |
| Tax still due at filing | $36,857 | $-18,000 |
| Left after federal tax | $343,143 | $702,000 |
The lump sum pushes $500,000 into the 35% bracket, which is why the 24% withholding falls $36,857 short. In the annuity column each $30,000 payment sits entirely in the 22% bracket, so withholding at 24% is slightly more than the tax and the difference comes back as a credit. The two columns are different prize sizes, so compare what is left, not the tax alone.
What this does not cover
- State and local tax, which varies by state. Enter a rate yourself or leave it at 0.
- Deductions for the cost of losing tickets, which need itemizing and are capped at 90% of losses for 2026. See the gambling winnings calculator.
- Prizes shared in a pool, estimated tax penalties on the unwithheld part, the net investment income tax rules and phase-outs of credits.
- Future years of an annuity, where your income and the brackets will differ from 2026.
- Taking a prize in a trust or company, or giving part of it away, which have separate tax rules.
Method and assumptions
Each scenario is run through the same 2026 bracket table used by the TNAADO federal income tax calculator, with your other taxable income as the base and the prize added on top. Withholding is a flat 24% of the prize when it is over $5,000. Nothing here is a forecast of what a lottery will pay or of how future tax law will treat it.
Results vary with your actual income, deductions, credits and filing situation. This page uses the figures you enter and published IRS rules; it does not predict what you will earn or owe. This is general information, not tax, legal or accounting advice; confirm your own situation against the linked IRS instructions or with a qualified preparer. Nothing here collects or stores personal data.
Sources
- IRS Instructions for Forms W-2G and 5754 (01/2026), retrieved October 26, 2026
- IRS Topic no. 419, Gambling income and losses, retrieved October 26, 2026
- IRS Publication 525, Taxable and Nontaxable Income, retrieved October 26, 2026
- IRS Rev. Proc. 2025-32 (2026 brackets, standard deduction, capital gains breakpoints), retrieved October 26, 2026
- IRS Instructions for Schedule A (Form 1040), retrieved October 26, 2026
Cite this page: TNAADO Tools, "Lottery winnings tax calculator," tools.tnaado.ca/us/lottery-winnings-tax-calculator/, figures retrieved October 2026.
Common mix-ups
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Often assumedThe 24% the lottery withholds is the tax on my prize, so I will owe nothing more at filing.
What the source saysThe Instructions for Forms W-2G and 5754 set 24% as the withholding rate on lottery winnings over $5,000. Withholding is a payment toward your tax, and the final bill comes from the regular brackets on your whole return. [1]
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Often assumedA big lottery prize is taxed at one flat rate, so the bracket I am in does not matter.
What the source saysRev. Proc. 2025-32 lists the 2026 rates as 10%, 12%, 22%, 24%, 32%, 35% and 37%. A prize is added to your other taxable income and taxed in whichever brackets the total reaches. [2]
- IRS Instructions for Forms W-2G and 5754 (01/2026)
- IRS Rev. Proc. 2025-32, 2026 inflation adjustments
Checked against these sources on .
Frequently asked questions
Is the 24% withholding the tax I owe on a lottery win?
No. 24% is the withholding rate in the Instructions for Forms W-2G and 5754. Your actual tax comes from the regular brackets on your whole return, which go up to 37% in 2026. A large prize usually leaves a balance due at filing.
Is there withholding on a prize of $5,000 or less?
Regular gambling withholding applies when winnings minus the wager are more than $5,000. A smaller prize can still be taxable and reportable; Topic 419 says all gambling winnings must be reported whether or not a Form W-2G is issued.
Are lottery winnings taxed as capital gains?
No. They are gambling income reported with other income on Schedule 1 and taxed at ordinary rates (Pub. 525 and Topic 419).
Can I deduct the tickets I bought that did not win?
Only as an itemized gambling loss on Schedule A, up to your winnings, and for 2026 only 90% of the losses count. The Instructions for Schedule A include the cost of nonwinning lottery tickets in gambling losses.
Do states tax lottery winnings?
Rules differ by state, so this page does not guess one. Look up your state revenue department, enter its rate and the tool will add it.
Why compare lump sum and annuity?
Because tax is progressive. A single large payment lands in the top brackets, while equal yearly payments are spread across lower ones. This tool shows the tax under the assumptions above; it does not decide which option is worth more to you.
Not tax advice
This is an educational estimate built from the numbers you enter and published IRS rules. It is not tax advice and does not predict what you will earn or owe. Also won at a casino or sportsbook? Use the gambling winnings tax calculator.