How this calculator works
The lump sum is the cash value of the jackpot, taxed through the 2026 federal brackets plus your state rate. Lotteries withhold 24% at payout, so more is usually due at tax time. The annuity is 30 payments that rise 5% a year, each taxed in the year it's paid.
Worked example
With the example values below: Lump sum after tax, $13,970,000 (from a $24,000,000 cash payout). Change any number above to run your own.
What you enter
| Input | Example |
|---|---|
| Advertised jackpot | $50,000,000 |
| Cash value (% of jackpot) | 48% |
| Payout | Lump sum |
| Filing status | Single |
| State tax rate | 5% |
Lump sum vs. annuity
Big jackpots are advertised as the total of 30 annual annuity payments that rise 5% a year. The lump-sum cash option is much smaller, often around half of the advertised jackpot, depending on interest rates. The lump sum gives you control and lets you invest; the annuity spreads the tax over 30 years and protects against spending it too fast.
Taking the lump sum puts almost everything in the 37% bracket in one year. Annuity payments are taxed each year, often at somewhat lower average rates.
Federal and state taxes
Winnings over $5,000 have 24% federal tax withheld, but the top federal rate is 37%, so large winners owe the difference at tax time. On a $100 million lump sum, that gap is about $13 million.
State taxes range from zero in states with no income tax, plus California which doesn't tax lottery winnings, to over 10%. Some cities, such as New York City, add local tax.
First steps after winning
- Sign the ticket and keep it secure.
- Hire a tax adviser, an estate attorney and a fee-only financial planner before claiming.
- Check whether your state lets you claim through a trust to stay anonymous.
- Set aside the tax not covered by withholding.
- Pay off high-interest debt and build a large cash reserve before big purchases.
Frequently asked questions
How much tax do you pay on lottery winnings?
Federal tax at up to 37%, with 24% withheld at payout, plus state tax of 0% to over 10%. On a large lump sum, total taxes are often 40% to 50%.
Is it better to take the lump sum or annuity?
The lump sum suits winners who will invest carefully and want control. The annuity offers guaranteed, inflation-boosted income and protection from overspending.
Which states don't tax lottery winnings?
States with no income tax, such as Florida, Texas, Washington, Tennessee and South Dakota, plus California, which exempts state lottery prizes.
How much is withheld from lottery winnings?
24% federal on prizes over $5,000, plus state withholding where applicable. That's often less than the final tax.
Are small lottery winnings taxable?
Yes, all gambling winnings are taxable income, even when nothing is withheld or no form is issued.
Grow what this calculator projects.
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Estimates for planning only, not financial, tax or legal advice. Tax tools use 2026 federal figures (brackets, $16,100 / $32,200 standard deduction, $19,000 gift exclusion, $15M lifetime exemption). Rates shown as defaults are examples; replace them with quotes you actually receive.