Are My Lottery Winnings Taxes?

Have you recently scored a big win or are curious about what would happen if you did? 

Navigating taxes when it comes to lottery winnings can feel overwhelming. Not to worry, Lotto.com is here to answer some commonly asked questions about claiming your big prize with the state lottery.

Be sure to note this is not tax advice, for official information about how your lottery winnings impact your taxes be sure to visit IRS.gov or contact your state taxing authority.

I won! Are my winnings going to be taxed?

Lottery winnings are considered income by the IRS, and if you score a big win (usually over $600) your state lottery will provide you with a W2-G form to report your winnings and the taxes that have been withheld from them.

When doing your taxes you will report your lottery winnings on the “other income” section of your tax return. 

Lotto.com helps you ease into the process by providing you with a claim form and detailed information on how to submit your ticket to the lottery to claim your winnings. 

Can I deduct my losing tickets on my taxes?

You can! Make sure you’re keeping organized, you may need to provide individual payslips or win/loss statements to validate the losses you have listed on your taxes. You can deduct up to the amount you reported winning on the same tax return. 

Lotto.com players can avoid the hassle of saving a bunch of paper tickets knowing all of your orders and playslips are conveniently located on your profile for you to view at any time. 

You can review past orders on your Lotto.com account by either selecting the order tab at the bottom of the Lotto.com homepage or by going to your profile and selecting “transactions” for a full breakdown.

Exactly how much will be withheld for federal taxes?

The state lottery will withhold 25% of winnings over $5000 to pass along to Uncle Sam. 

Does the state take any of my winnings too?

Unless you’re located in California, Florida, New Hampshire, Tennessee or Texas your state lottery will withhold additional winnings for state taxes. Here is a convenient breakdown of the percentage that will be withheld in each state.

Arizona 5%

Arkansas: 7%

Colorado: 4%

Connecticut 6.99%

Georgia 5.75%

Idaho 6.92%

Illinois 4.95%

Indiana 3.23%

Iowa 5%

Kansas 5%

Kentucky 5%

Louisiana 5%

Maine 5% Massachusetts 5%

Maryland 8%

Michigan 4.25%

Minnesota: 7.25%

Missouri 4% Montana 6.9%

Nebraska 5%

New Jersey: 8%

New Mexico 6%

New York: 8.82%

North Carolina 5.5%

North Dakota 2.9%

Ohio: 4%

Oklahoma 4%

Oregon: 8%

Pennsylvania 3.07%

Rhode Island 5.99%

South Carolina 7%

Texas: 0%

Vermont 6%

Virginia 4%

Wisconsin 7.69%

West Virginia 6.5%

This article is only intended for informational purposes and not meant to serve as tax or financial advice. For questions about your specific tax situation be sure to contact a tax professional for more information 

Lotto.com is an online lottery courier service that is now available on any mobile device. You can visit Lotto.com or download the app on the google play, apple or Samsung galaxy store.