Massachusetts lottery tax: one flat rate, then the surtax
Massachusetts taxes a lottery prize at 5 %, then adds a 4 % surtax on income above $1,107,750. Here is where each prize lands.
- Rate on prizes
- 5 %
- Surtax above
- $1,107,750
- Withholding
- 5 % from $600
- Credit schedule
- Schedule OJC
Lump sum after all taxes
$612,820
38.7 % of the prize goes to tax: $387,180. $290,000 is withheld at the claim, the rest is due with the 2026 return.
| Prize this year | $1,000,000 |
| Federal income tax (top rate reached 37 %) | $337,180 |
| Massachusetts tax | $50,000 |
| Withheld when the prize is paid | $290,000 |
| Still to pay with the return | $97,180 |
Compiled by Radif Partners · How we calculate · brackets, state rates and lottery rules read on official sites · estimate, not tax advice
Massachusetts treats a lottery prize as Part B income taxed at the flat 5 %, and every dollar of taxable income above $1,107,750 in 2026 pays a further 4 % surtax, for 9 % at the margin. The surtax threshold is the same for a single filer and a married couple filing jointly. A resident who wins $1,000,000 with a $60,000 salary stays just under it and owes Massachusetts $50,000, against $337,180 of federal tax, keeping $612,820. The Massachusetts Lottery withholds 5 % for the state on any payment of $600 or more, counted on the whole payment. Nonresidents are taxed too when the ticket was sold in Massachusetts: a New Hampshire resident pays Massachusetts $49,792 on the same $1,000,000. A 1995 letter ruling treats annuity payments as Massachusetts income even after the winner moves out of state. Only the cost of the winning ticket comes off the prize.
Your prize after Massachusetts tax
Lump sum after all taxes
$612,820
| Prize this year | $1,000,000 |
| Federal income tax (top rate reached 37 %) | $337,180 |
| Massachusetts tax | $50,000 |
| Withheld when the prize is paid | $290,000 |
Part B income at one rate, until the surtax line
Massachusetts has no brackets in the usual sense. Wages, interest and lottery winnings are all Part B income, taxed at 5 % (Massachusetts Tax Rates). There is no standard deduction; the personal exemption is $4,400 for a single filer and $8,800 for a couple (Personal Income Tax Exemptions). So the state tax on a prize is close to 5 % of it, with no progressive climb on the way up.
The change comes with the surtax that voters added to the constitution. For 2026 it applies at 4 % to taxable income above $1,107,750, a figure indexed each year and stated in the 2026 Form 1-ES instructions. The threshold does not double for a joint return. A married couple that wins $3,000,000, with $150,000 of other income, crosses it by a wide margin and owes Massachusetts $231,338; the prize alone carries 7.7 % of state tax, not 5 %.
| Resident prize | Federal | Massachusetts | Kept |
|---|---|---|---|
| $20,000 | $3,750 | $1,000 | $15,250 |
| $1,000,000 | $337,180 | $50,000 | $612,820 |
| $3,000,000, married couple | $1,060,411 | $231,338 | $1,708,252 |
| $267.5 million Powerball cash value | $98,942,180 | $24,032,914 | $144,524,906 |
On a jackpot share the surtax does the heavy lifting: at the Powerball cash value of the October 21, 2026 drawing, the state takes $24,032,914, about 9.0 % of the prize, because almost all of it sits above the line.
Withholding starts lower than the federal one
Technical Information Release 13-4 sets the state withholding at 5 % on lottery and wagering payments of $600 or more, residents and nonresidents alike, and on the entire payment rather than the part above the threshold (TIR 13-4). Federal withholding of 24 % only begins above $5,000, so a $2,000 scratch ticket can leave the claim center with state tax already taken and nothing held for the IRS. When a ticket is shared, the test is applied to each single payment of $600 or more, even if every member's share is smaller.
For a resident below the surtax line, the 5 % matches the tax almost exactly. Above it, the surtax is never withheld: on the couple's $3,000,000, the lottery holds back $150,000 for Massachusetts while the return will show $231,338. Withholding against the tax due measures that gap for the federal side as well.
Tickets that cross the New Hampshire line
Massachusetts taxes nonresidents on Massachusetts-source winnings: the Massachusetts Lottery, casinos and slots parlors licensed in the state, and multistate games when the ticket was bought within Massachusetts (Massachusetts tax information for gambling and the lottery). The border with New Hampshire makes this a daily question, since New Hampshire residents shop in Massachusetts and the reverse.
| Who wins, where the ticket was sold | Massachusetts | Home state | Kept |
|---|---|---|---|
| New Hampshire resident, Massachusetts ticket | $49,792 | $0 | $613,027 |
| Connecticut resident, Massachusetts ticket | $49,792 | $21,677 | $591,351 |
| Massachusetts resident, New Hampshire ticket | $50,000 | $0 | $612,820 |
New Hampshire has no income tax on wages or prizes, so its resident simply pays the Massachusetts tax and has nothing to credit it against. The Connecticut resident files a Massachusetts nonresident return and claims a credit at home. A Massachusetts resident who buys in Salem or Nashua owes Massachusetts the full 5 % anyway, because residents are taxed on lottery winnings wherever they arise; the prize goes on Schedule X rather than on line 8b of Form 1. Tickets bought in another state lays out the general rules.
Schedule OJC and its limits
When another state taxes a Massachusetts resident's prize, Schedule OJC gives a credit for the tax due to that state, not the amount withheld, and never more than the part of the Massachusetts tax caused by that income (income tax paid to another jurisdiction credit). City taxes elsewhere do not count, and nonresidents cannot claim it. Massachusetts appears in no reverse-credit arrangement in the official instructions read for this site.
Moving away does not end the Massachusetts annuity tax
This is where Massachusetts differs from most states. General Laws chapter 62, section 5A treats income from participation in a lottery within Massachusetts as Massachusetts-source income, and Letter Ruling 95-10 applied that to the future annual payments of a winner who had become a nonresident (Letter Ruling 95-10). A winner who keeps the annuity and moves to New Hampshire keeps paying Massachusetts on each installment: on the $635 million Powerball annuity, the state's share over 30 years is $55,813,332, against $55,887,420 for a winner who never leaves. Moving after winning compares states that let the payments go.
Losing tickets and casino losses
The Massachusetts rule on losses is narrow. Only the cost of the winning ticket or wager comes off lottery and general gambling winnings; losses claimed as federal itemized deductions do not carry over. The exception is losses at casinos, racing meetings and simulcasting licensees licensed under chapter 23K, deductible up to winnings from those same places in the same year. Whether the federal limit to 90 % of losses from 2026 reaches that deduction is not stated in the sources read.
Two cautions close the subject. The figures here are estimates on 2026 rules, not tax advice for a particular return, and the mass.gov pages were read through archived copies where the site blocked access. Lottery play is paid entertainment; anyone for whom it has stopped being one can call the National Problem Gambling Helpline at 1-800-MY-RESET (National Council on Problem Gambling).