Lottery Winnings: How Your Money Is Taxed

irs tax on lottery winnings
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The IRS considers net lottery winnings ordinary taxable income So after subtracting the cost of your ticket, you will owe federal income taxes

Federal tax Right off the bat, lottery agencies are required to withhold 24% from winnings of $5,000 or more, which goes to the federal

irs lottery tax The federal government withholds 24% of your winnings immediately You may owe additional federal taxes depending on your overall tax bracket Each state also

irs tax on lottery winnings The IRS considers lottery winnings as gambling winnings and taxes the income the same as other types of ordinary income This means you'll