TALLIVOMethodology
How the Lottery Tax Calculator works
How Tallivo estimates what a jackpot actually pays after federal and state tax, lump sum or annuity.
The formula
net = gross − [tax(other + winnings) − tax(other)] federal and state; annuity = 30 payments growing 5%/yr, each taxed independently
Step by step
- Winnings are ordinary income stacked on your other income; large prizes land almost entirely in the top federal bracket.
- The payer withholds a flat 24% federally on prizes over $5,000 (Form W-2G) — the calculator shows that withholding separately from the true bracket tax, because the gap is due at filing.
- Lump sum = advertised jackpot × the cash-value ratio published for that drawing (adjustable input, default 48%).
- The annuity is modeled as the Powerball/Mega Millions structure: 30 graduated payments rising 5% per year, each taxed at today's brackets and deduction.
- State tax uses the same 2025 state tables as the paycheck tools — with California's statutory exemption for California Lottery prizes encoded (its other gambling income is still taxed).
Assumptions & limitations
- Today's federal brackets, deduction, and state law held constant across annuity years — future law is unknowable.
- No itemized deductions, charitable strategies, local taxes, or multi-state ticket complications.
- The cash-value ratio varies with interest rates per drawing — always check the published figure.
Sources
Reviewed and updated for the 2026 tax year. Figures are planning estimates, not a loan offer — this is not financial advice.
Think one of these figures is wrong? Tell us and we'll check it — we verify against the primary source, not aggregator tables. How we build and check every calculator is documented in our editorial policy.