Powerball prizes are subject to tax. The rate of withholding depends on:
- the amount you win
- the jurisdiction in which you buy your US Powerball ticket
Find out all about the taxes you may have to pay on your US Powerball winnings below:
Do Australians have to pay taxes on Powerball winnings?
Lottery winnings, including Powerball’s, are not taxed in Australia. However, Australians that become Powerball winners are still subject to income tax in the States, both federal and state taxes combined.
How are Powerball taxes calculated?
Once you win a Powerball prize, the federal government takes 24 to 30% of the winnings.
- 24% when you are a US resident
- 30% when you are not residing in the States
When do you have to pay taxes on American lottery prizes?
American lottery prizes are taxed as follows, in the States:
- Winnings under USD 600 – You do not have to pay taxes on your lottery winnings in the United States, resident or not.
- Winnings over USD 600 – You must pay the federal rate first (24% for residents and 30% for non-residents) to which you have to consider there might be a state or city tax to add.
What are the state taxes on Powerball?
As mentionned above, Powerball taxes include a federal tax of 24 % for residents and 30% for non-residents + a state tax. In the interactive map below you can see which states take no fee and which take the most. The darker the color, the more tax you pay:
For more detailed informations on state taxes on Powerball prizes, see our table below:
| State | Tax |
|---|---|
| Arizona | 4.8% for residents |
| 6% for non-residents | |
| Arkansas | 5.9% |
| California | – |
| Colorado | 4% |
| Connecticut | 6.99% |
| Delaware | – |
| Florida | – |
| Georgia | 5.75% |
| Idaho | 6.925% |
| Illinois | 3.75% |
| Indiana | 3.23% |
| Iowa | 5% |
| Kansas | 5% |
| Kentucky | 5% |
| Louisiana | 5% |
| Maine | 5% |
| Maryland | 8.95% for residents |
| 8% for non-residents | |
| Massachusetts | 5% |
| Michigan | 4.25% |
| Minnesota | 7.25% |
| Mississippi | 3% – 5% |
| Missouri | 4% |
| Montana | 6.9% |
| Nebraska | 5% |
| New Hampshire | – |
| New Jersey | 5% – 8% |
| New Mexico | 6% |
| New York | 10.9% |
| North Carolina | 5.5% |
| North Dakota | 2.9% |
| Ohio | 4% |
| Oklahoma | 4% |
| Oregon | 8% |
| Pennsylvania | 3.07% |
| Puerto Rico | – |
| Rhode Island | 5.99% |
| South Carolina | 7% |
| South Dakota | – |
| Tennessee | – |
| Texas | – |
| Vermont | 6% |
| Virginia | 4% |
| Washington | – |
| Washington, D.C. | 8.5% |
| West Virginia | 6.5% |
| Wisconsin | 7.65% |
| Wyoming | – |
How is a Powerball jackpot taxed according to how you choose to collect it?
Lump sum payment
When you choose the lump sum payment, you received your winnings as “Cash Value”. Your prize will be taxes according to what you could read above: federal taxes of 24% for residents or 30% for non-residents + state taxes (to which you may have to add local taxes if you don’t live in the States).
Annuity
With the annuity option, you receive your winnings in 30 installments over 29 years. In this case, taxes are recalculated every year. This is because each state may recalculate their fees, due to inflation, for instance. This means that there is no way to know in advance how much you will end up paying as Powerball taxes.
If you scooped a big Powerball prize, we advise you to contact:
- the state lottery as they can give you guidance on your tax obligations
- a financial expert to advise you on what to do
Powerball taxes FAQ
If you win less than USD 600, you don’t have to pay US taxes on your Powerball prize.
On the other hand, if you win over USD 600, you will have to pay federal + state taxes.
That isn’t all:
Moreover, you will have to pay a larger federal tax if you are not residing in the States (30% instead of 24%). You may also have to pay a larger state tax depending on where your Mega Millions ticket was purchased.
If you play US Powerball online on theLotter & win, you will receive your prize directly on your personal account if it doesn’t exceed USD 600. However, if you win more, you will have a 30% federal tax to apply as well as a state tax + local tax. Our team will help you through the entire process.
The US federal tax amounts to 24% for US residents and 30 % for non-residents. However, to this you may have to add a state tax (some states do not apply any tax while other do – up to 10.9% of your winnings. Check out our infos above).
Moreover, to this, you may have to add local taxes, depending on where you live.