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Lottery Tax Calculator

What you actually keep from a jackpot — lump sum vs 30-year annuity, 2026 federal brackets plus your state, and the gap between the 24% withholding and the real tax bill.

InputsW-2G
$
%
$

The 24% withholding ($11,520,000) is NOT the tax — your bracket tax is $17,710,000. The $6,190,000 difference is due at filing.

You actually keepLUMP SUM
$30,290,000
cash value (48% of advertised)$48,000,000
federal tax$17,710,000
after-tax net$30,290,000
effective tax rate
36.9%
24% withholding
$11,520,000

A $100,000,000 advertised jackpot taken as a lump sum is really $48,000,000 — the cash value, about 48% of the headline — and after federal tax the winner keeps roughly $30,290,000, an effective 36.9% rate.

The lottery withholds only $11,520,000 up front (24%), but the true bill is $17,710,000 — the gap is due at filing. Figures are 2026 federal, single filer, no state tax; most states take more on top.

How the tax is calculated

Lottery winnings are ordinary income — they stack on top of whatever else you earn that year, so the tax on the prize is the tax on (other income + winnings) minus the tax you'd owe anyway. For the lump sum, that's one giant year of income taxed mostly at the top rate. For the annuity, it's 30 payments rising 5% per year (the Powerball/Mega Millions structure), each taxed independently:

lump: tax = fedTax(other + cash value) − fedTax(other)
annuity: p₁ × Σ 1.05ⁱ = advertised; each year taxed on (other + payment)

Annuity years are all taxed at today's 2026 brackets and standard deduction, held constant — future tax law is unknowable, so we state the assumption instead of guessing. State tax uses each state's ordinary income schedule, with California's statutory exemption for California Lottery prizes applied automatically.

Common questions

Why is the cash value so much smaller than the advertised jackpot?
The advertised jackpot is the total of 30 annuity payments spread over 29 years. The lump-sum cash value is the present value of that stream — the money actually sitting in the prize pool today — and it's published per drawing, typically around 45–55% of the headline number. The cash value % input lets you match the exact figure for your drawing.
I heard lottery taxes are 24%. Why does this show more?
The payer must withhold 24% federal tax on prizes over $5,000 (reported on Form W-2G) — but that's a down payment, not the bill. Winnings are ordinary income, and a big jackpot lands almost entirely in the top 37% bracket (which starts above $640,600 of taxable income for a single filer in 2026), so the difference between 24% withheld and your real bracket tax is due when you file.
Which states don't tax lottery winnings?
Nine states: California, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Eight of those simply have no state income tax on this kind of income — California is the interesting one: it has high income taxes and taxes other gambling winnings, but statutorily exempts California Lottery prizes.
Should I take the lump sum or the annuity?
Tax-wise, the annuity spreads the income across 30 tax years, so each payment re-uses the lower brackets from the bottom and the total tax bill comes out lower. But taxes aren't the whole story: a lump sum can be invested for decades, and inflation erodes the real value of payments arriving in year 30 — the time value of money often outweighs the tax difference. This calculator shows the tax math only; it's not financial advice.

How we calculate this

2026 federal brackets and standard deduction, mandatory 24% withholding shown separately from bracket tax, state ordinary-income schedules, 30-payment graduated annuity at 5%/yr — not financial advice.

Full methodology & sources →
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Estimates only. Assumes the standard deduction, no other credits or deductions, constant tax law across annuity years, and the state schedules on file; actual withholding and final tax depend on your full return. Not financial, tax, or legal advice.