What Percent Do You Pay in Taxes If You Win the Lottery?

What Percent Do You Pay in Taxes If You Win the Lottery?

What Percent Do You Pay in Taxes If You Win the Lottery?

If a person wins more than $413,201 as a single person or $464,850 as a couple in the lottery, the federal tax rate is 39.6 percent. State taxes may also come into play, but these vary based on the state of residence.

The amount of tax paid on lottery winnings also depends on whether the winner takes the winnings in a lump sum or in monthly payments. In February 2015, the Powerball jackpot sat at $500 million. If a single person were to win this jackpot and chose a lump sum payment, he would not receive $500 million. Instead, he would have to pay $134 million in federal taxes plus whatever state taxes apply.