Washington lottery tax: federal only, for now
Washington takes nothing from a lottery prize in 2026. The IRS does, and a ticket bought across the Columbia River in Oregon brings Oregon tax with it.
- Washington tax on prizes
- $0
- Federal withholding
- 24 % above $5,000
- Non-US winners
- 30 %
- Oregon tax for a WA buyer
- yes, above its threshold
State and local tax, ticket bought in Oregon
$97,071
Bought at home in Washington: $0. Difference: $97,071.
| Prize this year | $1,000,000 |
| Federal income tax (top rate reached 37 %) | $337,180 |
| Oregon tax as a nonresident | $97,071 |
| Washington tax | none |
| Withheld when the prize is paid | $320,000 |
| Still to pay with the return | $114,251 |
| After all taxes | $565,749 |
Oregon taxes nonresidents on prizes of its lottery over $600. Washington has no personal income tax on a lottery prize.
Compiled by Radif Partners · How we calculate · brackets, state rates and lottery rules read on official sites · estimate, not tax advice
Washington has no individual income tax in 2026, so a prize from Washington's Lottery, Powerball and Mega Millions included, carries federal tax and nothing else. A resident who wins $1,000,000 on a Washington ticket owes $337,180 to the IRS at the 2026 brackets and keeps $662,820; the lottery withholds 24 % of a prize over $5,000, which leaves $97,180 to settle with the federal return. Winners who are not US residents are withheld at 30 %. The exposure is across the border: a Vancouver resident whose winning ticket came from an Oregon store owes Oregon $97,071 on the same $1,000,000, with no Washington tax to credit it against. The Legislature has also enacted an income tax on high incomes that starts on January 1, 2028; whether it will reach annuity payments received from 2028 is not yet stated by the Department of Revenue.
A Washington resident, a ticket from another state
State and local tax, ticket bought in Oregon
$4,114
| Prize this year | $50,000 |
| Federal income tax (top rate reached 22 %) | $10,350 |
| Oregon tax as a nonresident | $4,114 |
| Washington tax | none |
What Washington's Lottery holds back
The claim page of Washington's Lottery mentions only federal withholding: 24 % on prizes over $5,000 for US citizens and residents, and 30 % for winners who are not US residents (Washington's Lottery, Claim Your Prize). No state percentage appears, because there is no state income tax to prepay. The Department of Revenue says the same in plain terms: Washington does not currently have an individual income tax (Washington DOR, Income tax).
The federal 24 % is a deposit, not the bill. Once a prize is large enough to reach the upper brackets of Rev. Proc. 2025-32, the tax due runs well above the amount held back. The table shows how the gap grows with the prize for a Washington resident on a Washington ticket.
| Prize on a Washington ticket | Federal withheld | Federal tax due | Left to pay in April | Kept |
|---|---|---|---|---|
| $1,000,000, single | $240,000 | $337,180 | $97,180 | $662,820 |
| $170.3 million Mega Millions cash, married couple | $40,872,000 | $62,955,611 | $22,083,611 | $107,344,390 |
On the Mega Millions cash value of the October 20, 2026 drawing, the couple keeps $107,344,390, the best result any state of residence can give, since only the federal tax applies. Withholding against the tax due shows the same gap for any state.
The Oregon ticket
Clark County lives next to Portland, and many Washington residents buy Powerball and Mega Millions tickets on the Oregon side. Oregon taxes nonresidents on Oregon Lottery winnings, games sold in Oregon included, when a single ticket or play pays more than $600, and the Oregon Lottery withholds 8 % on prizes of $1,500 or more (Oregon Lottery, Claim a Prize). For a Washington resident that Oregon tax is final: there is no home-state return on which to claim a credit.
| Situation | Oregon | Home state | Kept |
|---|---|---|---|
| Washington resident, Oregon ticket, $50,000 | $4,114 | $0 | $35,536 |
| Washington resident, Oregon ticket, $1,000,000 | $97,071 | $0 | $565,749 |
| Washington resident, Washington ticket, $1,000,000 | $0 | $0 | $662,820 |
The difference between the last two lines, $97,071, is the cost of the store's address. Oregon computes the nonresident tax on the prize at its graduated rates, which reach 9.9 %, and the Oregon withholding of 8 % usually falls short of it, so an Oregon nonresident return follows. Nonresident lottery tax lists every state that taxes outsiders this way.
Oregon and Idaho residents who win in Washington
The border works the other way too. Washington does not tax a nonresident, so a ticket bought in Washington adds no state tax at the place of sale. The winner's home state is another matter. Oregon taxes its residents on gambling winnings from all sources, so a Portland resident who wins $1,000,000 on a Washington ticket owes Oregon $98,219 anyway; an Idaho resident in the same position owes Idaho $53,000. For them, the Washington address of the store saves nothing.
The 2028 income tax and the annuity
In 2026 the Legislature passed Engrossed Substitute Senate Bill 6346, signed on March 30, 2026 (Governor's announcement). The final bill report describes a 9.90 percent tax imposed beginning January 1, 2028 on Washington taxable income, after a standard deduction of $1 million per individual, with the combined deduction of spouses limited to $1 million (Final Bill Report ESSB 6346). Nothing changes for a prize paid in 2026 or 2027.
The annuity is where the date matters. A Washington winner of the $413 million Mega Millions annuity receives $6,216,243 at first and $25,586,898 in the last year, and most of those payments would fall in years when the new tax is in force. The Department of Revenue has not yet published whether lottery and gambling winnings belong to Washington taxable income, and the law faces court challenges, so the calculator on this page applies no Washington tax to any installment. Lump sum or annuity compares the two choices under federal tax alone.
Washington's capital gains tax does not apply either: it taxes the sale of long-term capital assets such as stocks (Capital gains tax), and a lottery prize is ordinary income, not the sale of an asset.
The estimates here apply 2026 rules and are not tax advice. Help with gambling that has stopped being fun is free and confidential at 1-800-MY-RESET, the National Problem Gambling Helpline (NCPG).