New York lottery tax in 2026, from Albany to the five boroughs
New York stacks three layers on a prize: the state, New York City or Yonkers for their residents, and a nonresident rule that follows a ticket bought in the state across the Hudson.
- Top New York State rate
- 10.9 %
- Top New York City rate
- 3.876 %
- Yonkers surcharge
- 16.75 % of state tax
- Nonresidents taxed above
- $5,000
Lump sum after all taxes
$1,534,177
48.9 % of the prize goes to tax: $1,465,823. $1,047,000 is withheld at the claim, the rest is due with the 2026 return.
| Prize this year | $3,000,000 |
| Federal income tax (top rate reached 37 %) | $1,054,611 |
| New York tax | $294,933 |
| New York City resident tax | $116,280 |
| Withheld when the prize is paid | $1,047,000 |
| Still to pay with the return | $418,823 |
Compiled by Radif Partners · How we calculate · brackets, state rates and lottery rules read on official sites · estimate, not tax advice
New York taxes lottery prizes as ordinary income, its own lottery included, at rates that reach 10.9 % once income passes the top threshold. A married couple earning $120,000 who win $3,000,000 on a New York ticket owe New York State $294,933 on the prize; in New York City the city adds $116,280, and in Yonkers the surcharge of 16.75 % of state tax adds $49,401. The New York Lottery withholds state tax on proceeds over $5,000 at the highest effective rate of the year, $327,000 here, which is more than the state tax this couple actually owes. A nonresident is taxed only when the prize exceeds $5,000 and, for Powerball or Mega Millions, only when the ticket was bought in New York. Residents who pay another state claim Form IT-112-R, and annuity installments stay taxable by New York after the winner moves away.
Your New York prize, state and city
Lump sum after all taxes
$1,534,177
| Prize this year | $3,000,000 |
| Federal income tax (top rate reached 37 %) | $1,054,611 |
| New York tax | $294,933 |
| New York City resident tax | $116,280 |
Where in New York the winner lives
For a New York resident the state tax is the same in Buffalo, Albany or Brooklyn. What changes is the local layer. New York City residents pay the city's resident income tax on lottery prizes, and Yonkers residents pay the Yonkers surcharge, a percentage of their net state tax; the Department of Taxation and Finance confirms in its lottery winners' publication that both apply to prizes and are withheld at the claim (Publication 140-W). Residents of other cities, including those who commute into Manhattan, owe no city tax on a prize.
| Home | New York State | City or Yonkers | Federal | Kept |
|---|---|---|---|---|
| Upstate or Long Island | $294,933 | $0 | $1,054,611 | $1,650,457 |
| New York City | $294,933 | $116,280 | $1,054,611 | $1,534,177 |
| Yonkers | $294,933 | $49,401 | $1,054,611 | $1,601,056 |
The New York City schedule tops out at 3.876 %, a rate taken from the 2025 IT-201 instructions (IT-201 instructions). The 2026 city withholding tables for wages print a different supplemental rate, but that rate belongs to paychecks, not to lottery claims (NYS-50-T-NYC).
A flat rate on large prizes
New York's brackets are not the whole story for a jackpot. Once New York adjusted gross income passes $5,000,000, a supplemental tax recaptures the lower brackets and every dollar of taxable income is taxed at a single rate; above $25,000,000 that rate is 10.9 % (Tax Law section 601). For the $267.5 million cash value of the October 21, 2026 Powerball jackpot, the New York tax is therefore close to 10.9 % of the whole prize, salary included. Smaller prizes stay in the graduated range, as in the table above.
Withholding that can exceed the tax
Publication 140-W says the lottery withholds state tax on any prize with proceeds over $5,000, for residents and nonresidents, at "the highest effective rate of state tax for the year in which a payment is made", and city tax for New York City and Yonkers residents at the city's highest rate. The publication prints no percentage; this site uses the top rate of the current schedule, 10.9 %. On a mid-size prize that rate is higher than the tax actually due, so the couple above has $327,000 withheld for the state against $294,933 owed, and the difference comes back with the IT-201. The federal side runs the other way: 24 % withheld, far less than the federal tax.
The $5,000 line for nonresidents
A nonresident owes New York tax on a New York Lottery prize only when the proceeds, meaning the total prize less the ticket cost, exceed $5,000. For a group, the test applies to the group's total prize. Multistate games count only when the winning ticket was bought in New York State, so a Connecticut commuter's Mega Millions ticket from a Grand Central newsstand is New York income, while the same game bought in Stamford is not. A New Jersey resident who wins exactly $5,000 owes New York nothing and pays New Jersey $276; at $20,000, New York takes $1,039 and New Jersey keeps only the part its credit does not cover.
| Winner lives in | New York tax | Home state after credit | Kept |
|---|---|---|---|
| New Jersey | $289,500 | $7,705 | $1,648,185 |
| Connecticut | $289,500 | $3,084 | $1,652,805 |
| Pennsylvania | $289,500 | $0 | $1,655,890 |
| Florida | $289,500 | $0 | $1,655,890 |
Each neighbor credits the New York tax up to its own tax on the prize, so the New York figure is close to a floor for anyone who buys in the state. The nonresident return is the IT-203 (IT-203 instructions). Nonresident lottery tax compares New York's line with other states.
New York residents with a ticket from elsewhere
New Yorkers are taxed on prizes from every state. When the other state taxes the prize too, Form IT-112-R gives a credit equal to the lesser of the other state's tax and the New York tax on the doubly taxed income (IT-112-R instructions). A couple with a $3,000,000 New Jersey prize pays New Jersey $288,998 and New York $5,935 after the credit. The credit covers state taxes; this site does not reduce New York City tax with it, since the instructions read limit it to the state tax. New York lists no state whose tax it refuses to credit.
Leaving New York with an annuity
New York is explicit on a point most states leave open. Installments of a New York Lottery prize won on or after October 1, 2000, with proceeds over $5,000, remain New York source income when paid to a nonresident, including a former resident who moved away (Publication 140-W). A move to Florida stops the city tax and the residence tax on other income, not the New York tax on the remaining payments. For a small prize won as a resident, the unpaid balance is accrued in the year of the move unless a bond is posted. Moving after winning the lottery follows a 30-year schedule across a move.
Gambling losses on a New York return
Losses are deductible only as a New York itemized deduction on Form IT-196, up to winnings, computed with the federal rules that applied to tax year 2017 (IT-196 instructions). Read literally, that leaves out the federal cap that from 2026 allows 90 % of losses; the instructions read do not discuss the new cap. Winnings are reported in full, never netted.
These figures are estimates built on the published schedules, not tax advice, and the Department of Taxation and Finance has the final word. Help for anyone whose play has stopped being fun is free at 1-800-MY-RESET.