Lottery Tax Calculator
Powerball or Mega Millions take-home pay: lump sum vs 30-year annuity, 24% federal withholding vs the 37% you really owe, and your state's income tax.
Lottery Tax Calculator: with the default inputs, lump sum after tax is $144,932,820.
The headline number. It is the sum of all 30 annuity payments, not the cash you can take today.
Announced with each drawing; recent Powerball jackpots ran about 45–50% (e.g. $826.4M cash on $1.80B in Sept 2025).
Its income tax is applied to the prize. Assumes you bought the ticket in your home state.
Your usual income before the win. The prize is taxed on top of it.
- Cash option before tax
- $230,000,000
- Federal income tax on the lump sum
- $85,067,180
- Federal 24% withheld at claim
- $55,200,000
- Still owed at filing (federal)
Actual federal tax minus the 24% withheld — what you'll owe in April.
- $29,867,180
- State tax on the lump sum
- $0
- First annuity payment before tax
- $7,525,718
- First annuity payment after tax
- $4,774,022
- Final (30th) payment after tax
- $19,548,250
- All 30 annuity payments after tax
- $315,984,592
- Effective tax rate on the lump sum
- 37%
Assumptions
- Cash option percentage is an input; the default 46% is close to recent Powerball draws (e.g. $826.4M cash on a $1.80B jackpot, September 2025). Use the figure announced for your drawing.
- Annuity: 30 payments, the first at claim and each later one 5% larger, summing to the advertised jackpot (the Powerball/Mega Millions convention).
- Federal tax is the extra ordinary-income tax from stacking the prize on your other income, after the standard deduction, using the selected year's IRS brackets for every annuity year; withholding is the 24% regular gambling rate.
- State tax is the extra state income tax from the same stacking, on your home state's own schedule; California's exemption for its own lottery is applied, assuming the ticket was bought in your home state. No other state lottery exemptions, city taxes or other-state credits are modelled.
- One US-resident winner; no pools, trusts, gifts, estate planning or investment return on the lump sum.
| Payment | Before tax | 24% withheld | Federal tax | State tax | After tax |
|---|---|---|---|---|---|
| 1 | $7,525,718 | $1,806,172 | $2,751,696 | $0 | $4,774,022 |
| 2 | $7,902,003 | $1,896,481 | $2,890,922 | $0 | $5,011,082 |
| 3 | $8,297,104 | $1,991,305 | $3,037,109 | $0 | $5,259,995 |
| 4 | $8,711,959 | $2,090,870 | $3,190,605 | $0 | $5,521,354 |
| 5 | $9,147,557 | $2,195,414 | $3,351,776 | $0 | $5,795,780 |
| 6 | $9,604,935 | $2,305,184 | $3,521,006 | $0 | $6,083,929 |
| 7 | $10,085,181 | $2,420,444 | $3,698,697 | $0 | $6,386,484 |
| 8 | $10,589,440 | $2,541,466 | $3,885,273 | $0 | $6,704,167 |
| 9 | $11,118,912 | $2,668,539 | $4,081,178 | $0 | $7,037,735 |
| 10 | $11,674,858 | $2,801,966 | $4,286,878 | $0 | $7,387,980 |
Payment 1 is made at claim; payments 2–30 follow yearly. Taxes assume this year's brackets every year and your other income unchanged.
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How this is worked out
The formula
Cash option = jackpot × cash % Federal tax on a prize = tax(other income + prize − standard deduction) − tax(other income − standard deduction) Withholding at claim = 24% × prize (when the prize is over $5,000) Owed at filing = federal tax − withholding Annuity payment k = P × 1.05^(k−1), k = 1…30, with P = jackpot × 0.05 ÷ (1.05³⁰ − 1) State tax = state tax(other + prize) − state tax(other), using the state's income-tax schedule
Open How it’s calculated above to see this worked through with your own numbers.
What you enter
- Advertised jackpot (annuity value)
- The headline number. It is the sum of all 30 annuity payments, not the cash you can take today.in dollars · 0 or more · defaults to 500000000
- Cash option as % of jackpot
- Announced with each drawing; recent Powerball jackpots ran about 45–50% (e.g. $826.4M cash on $1.80B in Sept 2025).a percentage · from 1 to 100 · defaults to 46
- Filing status
- Choose one of 4 options.Single · Married filing jointly · Married filing separately · Head of household
- State you live in
- Its income tax is applied to the prize. Assumes you bought the ticket in your home state.Alabama · Alaska — no income tax · Arizona · Arkansas · California · Colorado · Connecticut · Delaware · District of Columbia · Florida — no income tax · Georgia · Hawaii · Idaho · Illinois · Indiana · Iowa · Kansas · Kentucky · Louisiana · Maine · Maryland · Massachusetts · Michigan · Minnesota · Mississippi · Missouri · Montana · Nebraska · Nevada — no income tax · New Hampshire — no income tax · New Jersey · New Mexico · New York · North Carolina · North Dakota · Ohio · Oklahoma · Oregon · Pennsylvania · Rhode Island · South Carolina · South Dakota — no income tax · Tennessee — no income tax · Texas — no income tax · Utah · Vermont · Virginia · Washington — no income tax · West Virginia · Wisconsin · Wyoming — no income tax · Skip state tax
- Other taxable income each year
- Your usual income before the win. The prize is taxed on top of it.in dollars · 0 or more · defaults to 60000
- Tax year brackets(under More options)
- Annuity years are all taxed on this year's brackets (no inflation indexing).2026 · 2025
What you get back
- Lump sum after taxmain answer
- Cash option before tax
- Federal income tax on the lump sum
- Federal 24% withheld at claim
- Still owed at filing (federal)
- Actual federal tax minus the 24% withheld — what you'll owe in April.
- State tax on the lump sum
- First annuity payment before tax
- First annuity payment after tax
- Final (30th) payment after tax
- All 30 annuity payments after tax
- Effective tax rate on the lump sum
What this assumes
- Cash option percentage is an input; the default 46% is close to recent Powerball draws (e.g. $826.4M cash on a $1.80B jackpot, September 2025). Use the figure announced for your drawing.
- Annuity: 30 payments, the first at claim and each later one 5% larger, summing to the advertised jackpot (the Powerball/Mega Millions convention).
- Federal tax is the extra ordinary-income tax from stacking the prize on your other income, after the standard deduction, using the selected year's IRS brackets for every annuity year; withholding is the 24% regular gambling rate.
- State tax is the extra state income tax from the same stacking, on your home state's own schedule; California's exemption for its own lottery is applied, assuming the ticket was bought in your home state. No other state lottery exemptions, city taxes or other-state credits are modelled.
- One US-resident winner; no pools, trusts, gifts, estate planning or investment return on the lump sum.
About this calculator
A lottery jackpot is three different numbers. The advertised jackpot is the total of a 30-year annuity. The cash option is what the lottery actually has in the prize pool today — typically a little under half the headline. And what you take home is the cash option after federal income tax at mostly 37%, plus whatever your state charges. This calculator works out all three, for both the lump sum and every annuity payment.
How to use it
Type the advertised jackpot and the cash value as a percentage — the lottery publishes the cash figure with every drawing, and Powerball and Mega Millions cash options have recently run about 45–50% of the annuity. Pick your filing status and state, and enter your normal income so the prize is taxed on top of it. Solve for can tell you, say, what jackpot leaves you $100 million after tax.
How to read the results
- Lump sum after tax is the cash option minus federal and state income tax.
- 24% withheld is what the lottery sends the IRS when you claim. It's a withholding rate, not the tax: a jackpot pushes almost all of it into the 37% bracket, so you'll owe roughly another 13% of the prize when you file. Set it aside, and pay it as a quarterly estimate.
- Annuity: one payment at claim, then 29 yearly payments that each grow 5%, totalling the advertised amount. The table lists every payment before and after tax.
- The bar chart compares what each option leaves you in total; the annuity always looks bigger because its payments are spread over 29 years and partly reflect interest the lottery earns on the cash.
Lump sum or annuity?
The cash option is roughly the present value of the annuity, so the choice is mostly about whether you can beat the lottery's investment return after tax, and whether you trust yourself with the money. The annuity spreads income across years but each payment is still big enough to sit almost entirely in the top bracket, so it saves little federal tax. It also exposes you to future rate changes, in either direction.
State taxes and caveats
States tax lottery prizes as ordinary income at their normal rates, so this uses each state's own schedule. Nine states have no income tax on wages, and California does not tax its own lottery's prizes, including Powerball and Mega Millions tickets bought there. If you buy in another state, that state may tax the prize and your home state usually credits it. City taxes, the 30% nonresident-alien withholding, and splitting a prize with a pool or trust are not modelled.
Frequently asked questions
▸How much tax do you pay on a Powerball jackpot?
Federal tax is ordinary income tax, so almost all of a jackpot is taxed at the top 37% rate. The lottery withholds 24% when you claim, and you pay the rest — about 13% more — when you file, plus state income tax where you live.
▸Why is the cash option less than half the advertised jackpot?
The advertised jackpot is the total of 30 annuity payments over 29 years. The cash option is the money in the prize pool today that would fund those payments, so it's roughly their present value at current interest rates.
▸How does the Powerball annuity work?
You receive one payment immediately and then 29 annual payments, each 5% larger than the last; together they add up to the advertised jackpot. On a $1 billion jackpot the first payment is about $15.05 million before tax.
▸Which states don't tax lottery winnings?
States without an individual income tax — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming — don't tax them. California also exempts prizes from the California Lottery.
▸Is the annuity better for taxes?
Only a little. Each yearly payment on a big jackpot is still large enough to be taxed mostly at 37%, so the total tax is similar; the annuity mainly trades access to the money now for guaranteed payments later.
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What a future lump sum and a payment stream are worth today at any discount rate — with the discount factor, the annuity value and a period-by-period table.
Project investment growth with monthly contributions, annual raises, fund expense ratios and inflation — with a yearly split of what you invested vs. earned.
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