Lottery Tax Calculator

Estimate your take-home lottery winnings after federal, state, and optional local taxes. Compare Lump sum vs Annuity, include estimated withholding, and see a clean breakdown.

Background

Lottery prizes are typically taxed as ordinary income (federal + state, and sometimes local). The payout type (lump sum vs annuity) can change the taxable income timing. This calculator gives an estimate — final tax depends on your full tax return.

Enter values

Tax system

United States (estimate: federal + state)

Custom (enter your own rates)

US mode uses a simplified estimate (not full bracket modeling). Custom mode lets you enter exact rates.

Prize amount

Enter the advertised prize or your actual prize amount. Commas are OK.

Payout type

Lump sum value (% of advertised prize)

Many big jackpots offer a lump sum around 50–70% of the advertised annuity.

Filing status (US)

Used to estimate federal effective tax rate in US mode.

State

In US mode, this is a rough estimate. Tax rules vary and can change.

State tax rate (%), only if “Other / enter custom rate”

Local tax rate (optional, %)

Some cities/counties have local taxes. Leave blank if none.

Withholding (optional):

Show estimated withholding

Withholding rate (%)

This is money withheld upfront, not necessarily your final tax owed.

Options:

Show step-by-step

Show important notes

Show mini visualization

Quick picks:

Chips prefill common prize and tax scenarios and run the calculation.

Result:

No results yet. Enter values and click Calculate.

How to use this calculator

Enter your prize amount and choose Lump sum or Annuity.
Pick US (estimate) or Custom (your own tax rates).
Add state + optional local tax, then click Calculate.
Use the breakdown to estimate take-home and compare payouts.

How this calculator works

Lump sum: converts advertised prize using your lump sum percentage.
Annuity: spreads prize across years (simple equal-pay estimate).
Taxes: estimates federal + state + local totals and subtracts from payout.
Withholding: shows how much might be held back upfront (optional).

Formula & Equation Used

Lump sum cash payout: Cash = Prize × (Lump% / 100)

Total tax: T = Cash × (federal% + state% + local%)

Take-home: Net = Cash − T

Effective tax rate: ETR = T / Cash

Example Problems & Step-by-Step Solutions

Example 1 — Lump sum

Advertised prize = \$5,000,000, lump sum = 60%, total tax rate = 32%.

Cash payout = 5,000,000 × 0.60 = 3,000,000
Total tax = 3,000,000 × 0.32 = 960,000
Take-home = 3,000,000 − 960,000 = 2,040,000

Example 2 — Annuity (simple)

Prize = \$2,000,000, annuity = 30 years, total tax rate = 28%.

Average per year (before tax) = 2,000,000 ÷ 30 ≈ 66,667
Average tax per year ≈ 66,667 × 0.28 ≈ 18,667
Average take-home per year ≈ 66,667 − 18,667 ≈ 48,000

Example 3 — Custom rates

Prize = \$750,000, federal = 20%, state = 5%, local = 0%.

Total tax rate = 0.20 + 0.05 + 0.00 = 0.25
Total tax = 750,000 × 0.25 = 187,500
Take-home = 750,000 − 187,500 = 562,500

Frequently Asked Questions

Q: Is withholding my final tax?

No. Withholding is what’s held back upfront. Final tax depends on your full return.

Q: Why is annuity estimated evenly?

Real annuities can grow each year. This calculator uses a simple equal-pay estimate to keep it understandable.

Q: Does this include deductions and credits?

No — it’s an estimate. Your final tax depends on deductions, other income, and your full situation.

Q: Can I use this outside the US?

Yes — switch to Custom and enter your rates.