Ohio lottery tax in 2026: one rate, many neighbors
From 2026 Ohio taxes nonbusiness income at a single 2.75 % above $26,050. A lottery prize lands almost entirely in that band, whoever claims it.
- Ohio rate on a prize
- 2.75 %
- Ohio Lottery withholding
- 2.75 %
- Resident credit
- IT RC
- Federal withholding
- 24 %
Owed with the return on top of withholding
$97,180
Federal withholding is 24 % of a prize over $5,000; the federal tax actually due on this prize is $337,180 (33.7 %).
| Federal tax due | $337,180 |
| Federal withholding | $240,000 |
| State and city tax due | $27,500 |
| State withholding | $27,500 |
| Total withheld | $267,500 |
| Total tax | $364,680 |
Compiled by Radif Partners · How we calculate · brackets, state rates and lottery rules read on official sites · estimate, not tax advice
Ohio taxes a lottery prize as ordinary income, and from tax year 2026 its schedule has only one rate on nonbusiness income: 2.75 % on income above $26,050, the same for every filing status. On a $1,000,000 prize claimed by a single Ohioan with $60,000 of wages, the extra Ohio tax is $27,500 and the federal tax $337,180, which leaves $635,320. The Ohio Lottery withholds 2.75 % for the state under R.C. 5747.062, plus 24 % for the IRS over $5,000. A Pennsylvania, Kentucky, Indiana or West Virginia resident who wins on an Ohio ticket owes Ohio as a nonresident, because the reciprocity that covers wages does not cover lottery winnings, and then claims a credit at home. An Ohio resident who wins in another state claims the Ohio Resident Credit on Schedule IT RC. Gambling losses do not reduce Ohio income, and a resident of a school district on the traditional base pays that district's tax on the prize too.
Ohio prize: withheld at the claim against the tax due
Owed with the return on top of withholding
$97,180
| Federal tax due | $337,180 |
| Federal withholding | $240,000 |
| State and city tax due | $27,500 |
| State withholding | $27,500 |
A single rate replaces the Ohio brackets
Am. Sub. H.B. 96 rewrote the Ohio schedule for nonbusiness income starting with tax year 2026. Income up to $26,050 is not taxed and everything above it is taxed at 2.75 %; in 2025 a higher bracket still applied to larger incomes. For a lottery winner the change is simple to read: once wages have filled the zero band, every dollar of the prize costs 2.75 % in Ohio tax. On the $1,000,000 example the state share is $27,500, against $337,180 for the federal government, whose 37 % bracket takes most of the prize.
Two points of the 2026 schedule could not be confirmed on an official page while the Revised Code site refused connections: whether a fixed base amount survives below the single rate, and the 2026 personal exemption. The figures here apply 2.75 % above $26,050 with no exemption, which is the reading of the 2025 booklet notes on H.B. 96 (2025 Ohio IT 1040 instructions).
What the Ohio Lottery keeps at the claim
R.C. 5747.062 makes the lottery commission withhold Ohio tax from prize payments at 2.75 % for 2026, the same rate for residents and nonresidents (R.C. 5747.062). The prize threshold for that withholding is not written in the official text excerpt read for this page, so no threshold is shown here. Federal withholding follows the national rule: 24 % of a prize over $5,000. On the $1,000,000 prize the claim leaves $732,500 after $267,500 of combined withholding, and the April balance is $97,180, almost all of it federal. The state part is close to exact because the withholding rate and the tax rate are the same; the federal part is not, which withholding against the tax due explains.
A smaller prize behaves the same way. A married couple with $90,000 of other income who claim $20,000 owe $550 to Ohio and $2,400 to the IRS on it.
Buyers who cross into Ohio
Ohio has reciprocity agreements on wages with Indiana, Kentucky, Michigan, Pennsylvania and West Virginia, so a commuter from those states usually files no Ohio return. Lottery, casino and sports gaming winnings are carved out of that exception: a nonresident reports Ohio Lottery prizes on the IT NRC as Ohio income (IT NRC instructions). The home state then taxes the same prize and credits the Ohio tax, up to its own tax on it. With Ohio's rate low, the credit usually absorbs all of it, and the total state bill is the higher of the two states.
| Winner on an Ohio ticket | Ohio tax | Home state after its credit | Total state | Kept |
|---|---|---|---|---|
| Ohio resident | $27,500 | $27,500 | $635,320 | |
| Pennsylvania resident | $26,824 | $3,876 | $30,700 | $632,120 |
| Kentucky resident | $26,824 | $8,176 | $35,000 | $627,820 |
| Indiana resident | $26,824 | $2,676 | $29,500 | $633,320 |
| West Virginia resident | $26,824 | $18,969 | $45,793 | $617,027 |
The Kentucky and West Virginia rows show the credit at work: Ohio is paid first and the home state collects only the difference between its tax and Ohio's. Pennsylvania's flat 3.07 % sits just above Ohio's rate, so a Pennsylvanian pays Ohio first and Harrisburg only the small remainder. The credit for tax paid to another state sets out how each state caps it.
Ohioans who win in another state: the IT RC
The reverse case runs through Schedule IT RC, the Ohio Resident Credit, carried to the IT 1040. It is the lesser of the income tax paid to the other state or the part of the Ohio tax that the doubly taxed income bears, and it covers only states and the District of Columbia, not cities. No credit exists for a state without an income tax, which is irrelevant here since such a state takes nothing. An Ohioan who wins $1,000,000 on a Pennsylvania ticket pays Pennsylvania $30,700; Ohio then credits $26,824 and collects $676. On a Michigan ticket, Michigan takes $42,263 and Ohio's credit is capped at its own tax on the prize, so Ohio collects $676 and the total state bill is $42,939. Tickets bought in another state covers every pair.
The school district line on the return
Many Ohio school districts levy an income tax of their own, filed on the SD 100. Districts on the traditional base tax modified adjusted gross income less exemptions, which includes a resident's lottery winnings; districts on the earned income base tax wages and self-employment income only, so by that definition the prize stays out. Each district sets its own rate, and the dataset behind this page lists no single figure, so the calculator leaves the school district tax out. Ohio W-2G forms report state, city and school district withholding separately. Whether a municipal income tax reaches a lottery prize could not be checked on an official text, and it is not added either.
Losses and the federal 90 % rule
Ohio starts from federal adjusted gross income, and the 2025 IT 1040 schedule of adjustments has no line for gambling losses. A winner who itemizes federally and deducts losses gets no matching relief on the Ohio return: the full prize stays in Ohio income. On the federal return, losses from 2026 are deductible only up to 90 % of their amount (Public Law 119-21); the 90 % rule works through it. Anyone for whom the losses have stopped being a pastime can reach free help at 1-800-MY-RESET.
Annuity payments after a move
R.C. 5747.20(B)(5)(a) allocates every prize award paid by the Ohio Lottery Commission to Ohio, whatever the winner's domicile (R.C. 5747.20). A jackpot winner who keeps the 30-payment annuity and moves to Florida or Tennessee still receives Ohio income each year and files an Ohio nonresident return for every installment. Moving after winning the lottery compares that rule with the other states. These figures are estimates on the 2026 rules as read, not tax advice for a particular claim.