Estimate the federal and state taxes on your lottery winnings.
This is your marginal tax rate, not your effective rate.
Enter 0 if your state has no income tax or you live in a state with no lottery income tax.
Lump Sum (after withholding)
Annuity (estimated annual payment, taxes calculated on annual payment)
Estimated Taxes
Federal Tax:
State Tax:
Total Estimated Taxes:
Estimated After-Tax Winnings:
Understanding Lottery Taxes
Winning the lottery is a life-changing event. While the excitement of a massive jackpot is exhilarating, it's crucial to understand the significant tax implications that come with such winnings. In the United States, lottery winnings are generally considered taxable income by both the federal government and many state governments. This calculator helps you estimate these tax liabilities.
How Lottery Winnings Are Taxed
Lottery winnings are treated as ordinary income. This means they are subject to the same progressive income tax rates as your salary or any other earnings.
Federal Taxes:
The IRS mandates that a mandatory 24% federal withholding tax is taken from lottery winnings of $5,000 or more if the winnings are at least 300 times the amount wagered. However, this is just an initial withholding. Your actual federal tax liability will depend on your total taxable income for the year and your applicable tax bracket. The amount you enter for the 'Estimated Federal Tax Bracket' should represent your marginal tax rate for the year you receive the winnings. For larger sums, this could push you into higher tax brackets.
State Taxes:
Most states also impose income tax on lottery winnings. The tax rates and rules vary significantly by state. Some states have no income tax at all, and a few states do not tax lottery winnings even if they have a general income tax. You should consult your state's specific tax regulations. If you win a large sum, you may owe taxes in the state where the ticket was purchased, or potentially your state of residence, depending on tax laws.
Lump Sum vs. Annuity:
Lottery winners typically have two options for receiving their prize:
Lump Sum: You receive a reduced, single payment upfront. This amount is significantly less than the advertised jackpot due to the present value calculation. Taxes are typically withheld from this lump sum.
Annuity: You receive the full advertised jackpot amount spread out over 20-30 years, usually with increasing annual payments. Each annual payment is taxed as income in the year it is received. The calculator can estimate taxes on an annual annuity payment if you input an estimated annual amount and select 'Annuity'.
Key Considerations:
Tax Brackets: The 'Estimated Federal Tax Bracket' you input should be your projected marginal tax rate. Large lottery wins can easily push you into higher tax brackets.
Tax Withholding: The initial 24% federal withholding is not necessarily your final tax liability. You may owe more or less depending on your total income.
Tax Year: Taxes are based on the income earned within a specific tax year. If you receive a large lump sum late in the year, it could significantly impact your tax obligations for that year.
Professional Advice: This calculator provides an estimate. It is highly recommended to consult with a qualified tax professional and a financial advisor immediately after winning the lottery to discuss your specific situation, tax planning strategies, and investment options.
Tax Law Changes: Tax laws are subject to change. Always refer to the latest IRS and state tax regulations.
Using this calculator can give you a clearer picture of the financial impact of taxes on your lottery winnings, allowing for better planning and informed decisions.
function calculateTaxes() {
var winnings = parseFloat(document.getElementById("lottoWinnings").value);
var federalRate = parseFloat(document.getElementById("federalTaxRate").value);
var stateRate = parseFloat(document.getElementById("stateTaxRate").value);
var isLumpSum = document.getElementById("lumpSum").value === "true";
var resultDiv = document.getElementById("result");
var resultFederalDiv = document.getElementById("result-federal");
var resultStateDiv = document.getElementById("result-state");
var resultTotalDiv = document.getElementById("result-total");
var resultAfterTaxDiv = document.getElementById("result-after-tax");
// Clear previous results
resultFederalDiv.textContent = "";
resultStateDiv.textContent = "";
resultTotalDiv.textContent = "";
resultAfterTaxDiv.textContent = "";
resultDiv.style.display = 'none';
// Input validation
if (isNaN(winnings) || winnings <= 0) {
alert("Please enter a valid total lottery winnings amount greater than zero.");
return;
}
if (isNaN(federalRate) || federalRate 100) {
alert("Please enter a valid federal tax rate between 0 and 100.");
return;
}
if (isNaN(stateRate) || stateRate 100) {
alert("Please enter a valid state tax rate between 0 and 100.");
return;
}
var federalTaxAmount = 0;
var stateTaxAmount = 0;
var totalTaxAmount = 0;
var afterTaxWinnings = 0;
// Calculate Federal Tax
// The 24% withholding is a common starting point but the calculator uses the user's provided federal rate as the *marginal* rate for estimation.
// For simplicity, we'll apply the user's provided federal rate to the total winnings.
federalTaxAmount = winnings * (federalRate / 100);
// Calculate State Tax
stateTaxAmount = winnings * (stateRate / 100);
// Calculate Total Tax
totalTaxAmount = federalTaxAmount + stateTaxAmount;
// Calculate After-Tax Winnings
afterTaxWinnings = winnings – totalTaxAmount;
// Format currency
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2,
maximumFractionDigits: 2,
});
resultFederalDiv.textContent = formatter.format(federalTaxAmount);
resultStateDiv.textContent = formatter.format(stateTaxAmount);
resultTotalDiv.textContent = formatter.format(totalTaxAmount);
resultAfterTaxDiv.textContent = formatter.format(afterTaxWinnings);
resultDiv.style.display = 'block';
}