State-by-State Lottery Tax Rates: Complete 2026 Guide

Why Your State Matters for Lottery Taxes

Where you live when you claim your lottery prize can cost you — or save you — millions of dollars. While every American lottery winner pays 24% federal tax withholding (with a potential total rate of 37%), state taxes create enormous variation in take-home amounts.

States With NO Lottery Tax (Best for Winners)

If you live in one of these states, you save significantly on lottery taxes:

• California — 0% (exempt from state income tax on lottery)
• Florida — 0% (no state income tax)
• New Hampshire — 0% (no state income tax)
• South Dakota — 0% (no state income tax)
• Tennessee — 0% (no state income tax on lottery)
• Texas — 0% (no state income tax)
• Washington — 0% (no state income tax)
• Wyoming — 0% (no state income tax)

On a $500 million lump sum, living in one of these states versus New York could save you over $38 million in state taxes alone.

States With the Highest Lottery Tax

• New York — 8.82% + NYC tax (3.876%) = up to 12.7% total
• Maryland — 8.95%
• Oregon — 8.00%
• New Jersey — 8.00%
• Minnesota — 7.25%
• Wisconsin — 7.65%
• Connecticut — 6.99%
• Idaho — 6.00%

Mid-Range Lottery Tax States (2-5%)

Most states fall in this range, including Virginia (4%), Ohio (3.99%), Illinois (4.95%), and Colorado (4.40%). Use our Lottery Tax Calculator to see the exact rate for your state and calculate your take-home amount.

Can You Move to Avoid Lottery Taxes?

Technically, you pay state taxes based on where you reside when you claim the prize. Some winners have relocated before claiming their ticket. However, state tax agencies are aware of this strategy, and you must genuinely establish residency. Simply buying property isn't enough — you need to demonstrate intent to make it your permanent home.

Calculate Your State's Impact

Use our free Lottery Tax Calculator to see exactly how your state's tax rate affects your take-home winnings. Select any state and jackpot amount for an instant, accurate breakdown.