Tax
New York Lottery winnings are considered income and are therefore subject to federal, state and local tax. There’s no money withheld on smaller prizes, but larger payouts will be impacted significantly. In fact, New York has a higher rate of tax than any other state in the U.S. Learn more about taxes on lottery prizes in New York, and use the calculator to see how much tax you would have to pay on a win.
Federal, State and Local Taxes
The New York Lottery is not required to report wins unless the prize amount is over $600, so if you land a payout up to this value you will receive it in full.
For prizes between $600 and $5,000, the New York Lottery will report winnings but won’t withhold any taxes unless you cannot provide a Social Security or tax identification number. Any prizes above $5,000 are subject to taxes at the following rates:
- Federal withholding - 24%
- Federal backup withholding - 24%
- Federal Non-resident Alien withholding - 30%
- New York State withholding - 10.90%
- New York City withholding - 3.876%
- Yonkers withholding - 1.82575%
As well as your place of residence, there are other factors which could determine how much tax is withheld. For example, if you owe past due child support, have received public assistance or owe past due taxes, money will be withheld from prizes of more than $600. You have to pay taxes regardless of how old you are, so senior citizens are not exempt.
Tax is such a complex issue and an individual’s circumstances can make a big difference to what is owed, so it is always worth consulting a financial planner or tax attorney if you win a big prize.
Payout Calculator
The Tax Calculator below helps you to find out how much you would actually receive if you win a big jackpot. The advertised jackpot for lotteries such as Powerball and Mega Millions shows what you would get if you accept the annuity option, but it does not take into account taxes. The majority of players also prefer to take the lump sum if they win.
The Payout Calculator tells you more accurately what the value of your prize would be. All you need to do is specify the prize amount and whether you would choose the cash or the annuity.
If you buy a ticket for a multi-state game such as Powerball, Mega Millions or Cash for Life whilst you are out of state, you should be aware tax rates differ considerably between jurisdictions. Nowhere else taxes as heavily as New York, and in some locations there is no state tax at all on lottery prizes, but rules can be different if you are not a resident of that particular place.