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How much would you actually keep after taxes?
💡 The IRS automatically withholds $120,000,000 (24%) from your winnings. The remaining $64,958,188 is owed at tax time.
The IRS automatically withholds 24% federal tax on any lottery winnings over $5,000 before you receive them. That's just withholding, not your final bill — see the next question.
The 24% withholding is a flat rate, but a large lottery win can push your actual taxable income into the top federal bracket of 37%. The difference between what's withheld and what you actually owe typically comes due when you file that year's tax return.
This calculator can show the tax difference between the two, but which is better for you depends on your personal financial situation, investment horizon, and risk tolerance — that's a decision to make with a licensed financial advisor, not something a calculator can decide for you.
Yes — state tax rates on lottery winnings vary widely, and some states have no state income tax on lottery winnings at all. Select your state above to see its rate reflected in the estimate.
Lottery winnings are taxed as ordinary income at both the federal and state level. The federal government withholds 24% of winnings over $5,000 upfront, but your actual tax bill may be higher because lottery winnings can push you into the top 37% bracket.
The cash option (lump sum) is typically about 50-52% of the advertised annuity jackpot. When you see a "$1 billion jackpot," the cash value is usually around $500-520 million — and that's the amount that gets taxed.
State taxes vary widely: states like Florida, Texas, California, and Washington have no state income tax on lottery winnings, while New York (8.82%) and Hawaii (11%) take the largest share. Some cities also add local taxes — New York City residents pay an additional 3.876%.
This calculator provides an estimate based on 2026 federal tax brackets and state marginal rates. Your actual tax liability may vary based on deductions, other income, and changes to tax law. Consult a tax professional for advice specific to your situation.
The choice between the lump sum and the annuity has real tax implications beyond the up-front withholding. Taking the annuity spreads the income — and the tax hit — across 29 or 30 years, which can keep some winners out of the very top tax bracket in any single year, especially if their other income is modest. Taking the lump sum puts the entire (smaller, cash-value) amount into one tax year, which for most winners means the whole prize gets taxed at the highest marginal rate immediately. Neither choice is objectively better — it depends on your other income, your state of residence, how you plan to invest or spend the money, and your own risk tolerance — which is exactly why large winners are routinely advised to consult a tax professional and a financial planner before choosing, since the decision is generally irreversible once made.
It's also worth remembering that the 24% federal withholding taken at the time of payout is not your final tax bill — it's just an upfront estimate. When you file your taxes for the year you claimed the prize, your lottery winnings get added to your other income and taxed at your actual marginal rate, which for a large prize is very likely above 24%. That means most big winners owe additional federal tax when they file, rather than getting a refund, so it's wise to set aside additional funds rather than assume the withholding covered everything.