Lottery Tax Calculator (Lump Sum vs Annuity)
Won the jackpot? See what’s left after taxes. This estimates the lump-sum cash option versus the annuity, after federal and state tax.
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Learn moreLump sum vs annuity, after tax
A lottery jackpot is advertised as the annuity total — 30 graduated payments over 29 years. The lump-sum cash option is only about 60% of that headline number. Either way, winnings are taxed as ordinary income: 24% is withheld up front but the top 37% federal rate applies to a big jackpot, plus state tax (0% in a handful of states). The lump sum gives you control and investment potential; the annuity spreads the tax and guards against overspending.
How it’s calculated & sources
Cash value ≈ 60% of the advertised jackpot. Federal tax uses the top 37% rate for large jackpots; state tax is your input. Annuity = jackpot ÷ 30, taxed the same each year. Figures are estimates — exact tax depends on your full return.
Benchmark: 24% federal withholding up front, 37% top federal rate on large jackpots (IRS), plus state tax; cash option typically ~60% of the advertised annuity.
Results update as you type and are general estimates, not personalized advice. Verify with a professional.
Worked example
On a $100 million jackpot in a 5% state, the cash value is about $60 million; after 37% federal and 5% state tax you keep roughly $34.8 million as a lump sum.
Frequently asked questions
Why is the lump sum so much less than the jackpot?
The advertised jackpot is the annuity total over 30 years. The cash option — about 60% — is what the lottery would invest to fund those payments.
How much tax do you pay on lottery winnings?
24% is withheld immediately, but large jackpots hit the top 37% federal bracket, plus state income tax (some states don’t tax winnings).
Lump sum or annuity — which is better?
The lump sum gives control and investment potential; the annuity spreads taxes and protects against overspending. Many advisors suggest the annuity unless you have a solid plan for the cash.