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Index/Topics/State Lottery Tax Policies

State Lottery Tax Policies

The variation in state policies regarding the taxation of lottery winnings.

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Jan 29, 2026
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Historical changes in US lottery tax rates

today centers on ordinary-income taxation with a mandatory 24% federal withholding on large prizes and final liability determined by marginal tax brackets (up to 37% under current law), while states v...

Feb 3, 2026

How do state tax rules treat lump-sum versus annuity lottery payments?

of lottery payouts depends less on the payout form than on where the winner is taxed: a is reported and taxed all in the year received, while annuity payments are taxed as ordinary income in each year...