New York City lottery tax: the third layer on a prize
A prize won by a resident of the five boroughs pays federal tax, New York State tax and a city tax. Here is the size of that third layer.
- Top NYC rate
- 3.876 %
- Yonkers surcharge
- 16.75 % of state tax
- State withholding
- 10.9 %
- Prize threshold
- $5,000
Lump sum after all taxes
$82,154,827
51.8 % of the prize goes to tax: $88,145,173. $59,434,700 is withheld at the claim, the rest is due with the 2026 return.
| Prize this year | $170,300,000 |
| Federal income tax (top rate reached 37 %) | $62,978,180 |
| New York tax | $18,566,165 |
| New York City resident tax | $6,600,828 |
| Withheld when the prize is paid | $59,434,700 |
| Still to pay with the return | $28,710,473 |
Compiled by Radif Partners · How we calculate · brackets, state rates and lottery rules read on official sites · estimate, not tax advice
New York City taxes the lottery winnings of its residents as ordinary income, on top of New York State tax, with rates that climb to 3.876 % once city taxable income passes $50,000 for a single filer. On a $1,000,000 prize, a single city resident with $60,000 of other income owes $38,760 to the city, $66,920 to the state and $337,180 to the IRS, and keeps $557,139. The same winner living in Albany or Buffalo keeps $595,899, and in Yonkers, where the surcharge is 16.75 % of the net state tax, $584,690. A commuter who lives in New Jersey and bought the ticket in Manhattan pays no city tax at all, because the city tax follows residence, not the place of purchase. For prizes over $5,000, the lottery withholds state and city tax for city residents at the highest effective rates of the year.
Your prize as a New York City resident
Lump sum after all taxes
$557,139
| Prize this year | $1,000,000 |
| Federal income tax (top rate reached 37 %) | $337,180 |
| New York tax | $66,920 |
| New York City resident tax | $38,760 |
A city tax that follows the winner's address
New York City levies a personal income tax on its residents, collected by the New York State Department of Taxation and Finance on the same return as the state tax. Lottery winnings are part of the income it reaches. Publication 140-W, the department's question and answer sheet for lottery winners, says that a resident of the city is subject to city tax on a prize and that the lottery withholds city tax at the claim (Publication 140-W). Nothing in that rule looks at the counter where the ticket was sold. A bodega in Queens and a gas station in Westchester produce the same city tax for a Brooklyn resident, and no city tax for a resident of Hoboken.
The city rates are short and close together. For 2026 the department publishes four brackets, reproduced below from the estimated tax instructions (Form IT-2105 instructions). A prize lands almost entirely in the last one, which is why the city layer behaves like a flat percentage on any prize above a few tens of thousands of dollars.
| City taxable income over | Single | Married filing jointly |
|---|---|---|
| $0 / $0 | 3.078 % | 3.078 % |
| $12,000 / $21,600 | 3.762 % | 3.762 % |
| $25,000 / $45,000 | 3.819 % | 3.819 % |
| $50,000 / $90,000 | 3.876 % | 3.876 % |
Three addresses, one prize
The table runs a $1,000,000 prize, bought in New York, through three addresses inside the state and two outside it. The federal line never moves. The state line moves with residence and with the ticket's state of sale. The city line exists for one of the five rows only.
| Winner lives in | Federal | State | City or Yonkers | Kept |
|---|---|---|---|---|
| New York City | $337,180 | $66,920 | $38,760 | $557,139 |
| Yonkers | $337,180 | $66,920 | $11,209 | $584,690 |
| Elsewhere in New York State | $337,180 | $66,920 | $0 | $595,899 |
| New Jersey, ticket bought in New York | $337,180 | $79,201 | $0 | $583,619 |
| Connecticut, ticket bought in New York | $337,180 | $71,469 | $0 | $591,351 |
The commuter rows deserve a second look. New York taxes a nonresident on a New York Lottery prize when its proceeds exceed $5,000, and a multistate ticket counts only if it was bought in the state. The New Jersey and Connecticut residents therefore file a New York nonresident return, then claim a credit at home for what New York took. City tax plays no part in their case. Nonresident lottery tax explains the source rule state by state, and the credit for taxes paid to another state shows how the home state gives part of it back.
What the lottery holds back at the claim
On a prize with proceeds above $5,000, the New York Lottery withholds 24 % for the IRS and state tax at the highest effective rate of the year, which the dataset sets at 10.9 %, the top bracket of the 2025 rate schedule. Publication 140-W adds city withholding for city residents at the city's highest effective rate, and Yonkers withholding for Yonkers residents. The publication itself prints no percentage, so the figures here are the top rates of the rate schedules, not a number taken from a lottery claim form.
The withholding rarely matches the bill. For a single filer, the state tax on a $1,000,000 prize is $66,920, while state withholding at the top rate comes to $109,000, so the claim can leave a refund on the state line even as the federal line leaves a balance. A smaller prize turns the picture around. On $20,000 the city adds $775 and the total tax is $5,605, yet federal and state withholding alone take $6,980, before any city withholding, so the return ends in a refund. Withholding against the tax due computes the gap for any amount.
Yonkers: a surcharge on the state tax
Yonkers works differently. Instead of brackets, a resident pays a surcharge equal to 16.75 % of the net New York State tax, figured on the state return. A prize that raises the state tax raises the surcharge in proportion. On the $1,000,000 example it adds $11,209. Nonresidents who earn wages in Yonkers pay a separate earnings tax on those wages (NYS-50-T-Y), but a prize is not wages, and the lottery publication ties the Yonkers rules for winners to residence.
A jackpot share in the city
Take the Mega Millions drawing of October 20, 2026, advertised at $413 million with a cash value of $170.3 million. A married couple in the Bronx with $120,000 of wages who take the cash owe $6,600,828 to the city alone, $18,569,633 to the state and $62,955,611 federally, and keep $82,173,929. The same couple living in Rochester keeps $88,774,757. The difference, $6,600,828, is the price of the city address in the year of the claim. A winner who keeps the annuity pays city tax on each payment only for the years spent as a city resident; moving after winning covers what follows a change of address.