How the calculators work
Every calculator on this site runs in your browser on one engine and one parameter file. The file holds the federal schedule, the game rules, and for each state its rates, lottery rules, credit and local taxes, with the official page each comes from and the date it was read (October 20, 2026 for this edition, 292 documents). This page lists the rules, the formulas, the tests and what is left out. Results are estimates: your return decides.
1. Federal income tax
The prize is added to the other taxable income of the year. Taxable income is income minus the 2026 standard deduction ($16,100 single, $32,200 married filing jointly) and is taxed at the rates of Rev. Proc. 2025-32. The tax on the prize is the tax with the prize minus the tax without it.
| Rate | Single, taxable income |
|---|---|
| 10 % | $0 to $12,400 |
| 12 % | $12,400 to $50,400 |
| 22 % | $50,400 to $105,700 |
| 24 % | $105,700 to $201,775 |
| 32 % | $201,775 to $256,225 |
| 35 % | $256,225 to $640,600 |
| 37 % | over $640,600 |
Withholding: the lottery withholds 24 % when winnings minus the wager exceed $5,000, on the whole amount, and 30 % for a foreign person (Instructions for Forms W-2G and 5754, Rev. January 2026). The difference with the tax is due with the return.
2. The state where the ticket was bought
When it is not your home state, the calculator checks whether that state taxes a nonresident on prizes of its lottery and above which amount (for example $5,000 in New York, $10,000 in New Jersey; none in California or Florida). Most states compute a nonresident's tax on his whole income and keep the share that comes from the state; the calculator does the same: state tax on all income × prize ÷ all income. The withholding of that state's lottery for nonresidents is shown separately.
3. The home state and its credit
The home state taxes the prize at its 2026 schedule (tax with the prize minus tax without), unless it exempts it: no income tax at all, or an exemption for prizes of its own lottery (California). When the other state taxed the same prize, the home state's credit is the smallest of three amounts: the other state's tax, the home state's tax on all income × prize ÷ all income, and the home state's tax on the prize. That is the limitation the credit forms apply (New York IT-112-R, New Jersey Schedule NJ-COJ, Pennsylvania Schedule G-L, Maryland Form 502CR and others). Virginia gives no credit on lottery and gambling winnings (Form 760 instructions, Schedule OSC). Where the other state gives the credit instead (Arizona, California, Oregon and Virginia in some pairs), the result is the same total and the page says so.
State specifics built into the schedules: New York's supplemental tax (flat 9.65 %, 10.3 % then 10.9 % of all taxable income once AGI passes $1,127,550, $5,000,000 and $25,000,000 for a single filer; the $50,000 phase-in below the first step is not modelled), Connecticut's benefit recapture, the Massachusetts 4 % surtax above $1,107,750, Maine's 2 % surcharge above $1,000,000, California's 1 % tax on income over $1,000,000. Standard deductions and exemptions are the state's 2026 amounts where published; phase-outs at high income are not modelled, which changes the tax on a large prize by a few hundred dollars at most.
4. City and county
New York City residents pay the city tax (3.078 % to 3.876 % on New York taxable income, 2026 schedule of Form IT-2105-I); Yonkers residents a surcharge of 16.75 % of their net New York State tax (Publication 140-W). Maryland residents pay the 2026 rate of their county or Baltimore City on Maryland taxable income; the Form 502CR credit applies to the county tax for the part the state tax does not absorb. Other local income taxes (Ohio school districts, Michigan cities, Indiana counties) are not applied, because the official pages read do not say they reach lottery prizes.
5. The annuity
Powerball and Mega Millions pay one immediate payment followed by 29 annual payments, each 5 % larger than the previous one (Powerball FAQ, Mega Millions How to Play). With J the advertised jackpot, the first payment is J × 0.05 ÷ (1.05³⁰ − 1) and payment k is the first × 1.05ᵏ⁻¹; the 30 payments add up to J. Each payment is taxed as the income of its year, with the 2026 brackets and rates kept for later years (no future rate is guessed). State thresholds such as New York's $5,000 look at the whole prize, not the installment.
6. Gambling winnings and losses
From 2026, losses are deductible at 90 % of their amount and up to the winnings, and only for those who itemize (Public Law 119-21, section 70114, amending IRC 165(d)). The calculator compares itemized deductions with the standard deduction, as the return does. Form W-2G: $2,000 threshold for payments in 2026 (slots and bingo gross, keno and poker net of the wager), and for lotteries and other wagers at least 300 times the wager. States follow their own rule on losses: Illinois, Wisconsin, Ohio, Connecticut, Kansas and North Carolina allow none, others follow the federal itemized deduction.
7. Tests
The hand computations below are automated tests; if one fails, the site does not build.
| Case | Engine | Reference |
|---|---|---|
| $1,000,000 prize, single, $60,000 of wages: federal tax | $337,180 | Rev. Proc. 2025-32 schedule by hand: $342,200 less $5,020 |
| Same prize: federal withholding | $240,000 | 24 % of the prize (W-2G instructions) |
| $1,000,000 annuity: first of 30 payments | $15,051 | $1,000,000 × 0.05 ÷ (1.05³⁰ − 1) |
| Same annuity: sum of the 30 payments | $1,000,000 | equals the advertised jackpot |
| New York AGI of $30 million: state tax | $3,270,000 | 10.9 % of all taxable income (Tax Law 601) |
| New Jersey resident, New York ticket, $1,000,000: credit | $66,033 | never above the New York tax nor the New Jersey tax on the prize |
| Break-even gambler, $20,000 won and lost, itemizing | $440 | 10 % of losses ($2,000) taxed at 22 % |
8. States with a note
| State | What the calculator does |
|---|---|
| California | The Franchise Tax Board has not published the 2026 brackets; its 2026 Form 540-ES tells filers to use the 2025 schedule, which is what the calculator applies, with the 1 % Behavioral Health Services Tax on taxable income over $1,000,000. |
| Hawaii | Hawaii's 2026 schedule could not be read; the calculator applies the 2025 schedule, rates 1.4 % to 11 %. |
| Idaho | Idaho indexes the income below which no tax is due; the 2026 amount is not published, so the 5.3 % rate is applied to the whole prize. |
| Missouri | Missouri's 2026 bracket thresholds could not be read on the Department of Revenue site; its 4.7 % top rate applies to the whole prize, which reaches the top bracket at a few thousand dollars. |
| Rhode Island | Rhode Island removes the standard deduction and exemption above $290,800 of income, which the calculator applies; the partial reduction between $261,000 and $290,800 is not modeled, so a total income in that band can show up to about $1,000 too little Rhode Island tax. |
9. What is not modelled
- Other deductions and credits, the alternative minimum tax, the 3.8 % net investment income tax on what the prize later earns, and estimated tax penalties.
- A change of residence during the year, part-year returns, and the residence disputes a state can open after a move.
- Gift and estate tax on money given away or left by a winner, and the sale of annuity payments.
- Tribal casinos' own rules and the tax of foreign countries on foreign players.
Corrections: contact page. These are estimates made to compare options, not tax advice.