Are lottery prizes taxable?
Lottery winnings of $600.01 and over are subject to Federal Withholding tax. For
winnings of $600.01, up to and including $5,000, you will be issued a W-2G form
to report your winnings on your federal income tax form. For winnings of
$5,000.01 and over, your state’s Department of Revenue removes the 24 percent federal
withholding before you receive your winnings check (or, if it is
an annuity, from each winnings check). You then receive a W-2G form with each
check to submit with your 1040 form to show that the 24 percent federal
withholding already has been paid. In addition to federal tax, your state will
make additional withholdings for taxes, and most states will deduct other money that
you may owe to the state, such as back taxes, child support, loan payments, etc.
In addition, like the federal tax withholding, the state tax withholding at the time
of prize payout may not be the total state tax owed at the end of the year.
You must consult your state division of taxation for more information about the total
state tax requirements for lottery winners.
The state tax withholdings are as follows:
|Arizona||5% state withholding (Arizona residents), 6% state withholding (non-Arizona residents)|
|Arkansas||7% state withholding|
|California||No state tax on lottery prizes|
|Colorado||4% state withholding|
|Connecticut||6.99% state withholding|
|Delaware||No state tax on lottery prizes|
|Florida||No state tax on lottery prizes|
|Georgia||6% state withholding|
|Idaho||6.925% state withholding|
|Illinois||4.95% state withholding|
|Indiana||3.23% state withholding|
|Iowa||5% state withholding|
|Kansas||5% state withholding|
|Kentucky||5% state withholding|
|Louisiana||5% state withholding|
|Maine||5% state withholding|
|Maryland||8.95% state withholding (Maryland residents), 8% state withholding (non-Maryland residents)|
|Massachusetts||5% state withholding|
|Michigan||4.25% state withholding|
|Minnesota||7.25% state withholding|
|Mississippi||5% state withholding|
|Missouri||4% state withholding|
|Montana||6.9% state withholding|
|Nebraska||5% state withholding|
|New Hampshire||No state tax on lottery prizes|
|New Jersey||8% state withholding|
|New Mexico||6% state withholding|
|New York||8.82% state withholding, plus: 3.876% (NYC residents), 1.323% (Yonkers residents)|
|North Carolina||5.499% state withholding|
|North Dakota||2.9% state withholding|
|Ohio||4% state withholding|
|Oklahoma||4% state withholding|
|Oregon||8% state withholding|
|Pennsylvania||3.07% state withholding|
|Puerto Rico||No state tax on lottery prizes|
|Rhode Island||5.99% state withholding|
|South Carolina||7% state withholding|
|South Dakota||No state tax on lottery prizes|
|Tennessee||No state tax on lottery prizes|
|Texas||No state tax on lottery prizes|
|U.S. Virgin Islands||† Unknown State Tax Rate|
|Vermont||6% state withholding|
|Virginia||4% state withholding|
|Washington||No state tax on lottery prizes|
|Washington, D.C.||8.5% state withholding|
|West Virginia||6.5% state withholding|
|Wisconsin||7.65% state withholding|
|Wyoming||No state tax on lottery prizes|
† This state/jurisdiction has not responded to our requests for this information.
How to Play
While picking numbers every week is one way to play, it’s not your only option. Let’s take a closer look at the different ways to play the game.
First, you have Easy Pick, which lets the computer choose six random numbers for you. You can also do a combination; you select some numbers, and the computer picks the rest.
You also can purchase Power Play. For an additional $1 per play, you can earn between two and 10 times more money if you win a non-jackpot prize. The Power Play can multiply your winnings by two, three, four, five or 10 times based upon the Power Play ball that is drawn in a given drawing. There are 24 2x balls, 13 3x balls, three 4x balls and 5x balls each and one 10X ball.
A Multi-draw play means you’re playing with the same numbers over and over again. You can play up to 26 times in a row with the same six numbers.
A Repeat play means you’re getting the same numbers repeatedly for one drawing. You can purchase the same numbers up to 20 times per drawing.
There are Game Machines in 1,500+ stores across Virginia that allow you to skip the checkout lines and get your Powerball tickets without the hassle of going to a cashier. You can also create a Virginia Lottery account and purchase your tickets online while you are anywhere in Virginia.
HOW TO PLAY POWERBALL:
Choose five different numbers from 1 to 69 and one Powerball number from 1 to 26
Place wagers by asking for a QUICK PICK or by using the Powerball playslip. Playslips are available at Wisconsin Lottery retailers.
Choose how many draws to play. Each ticket costs $2 per play per draw. Powerball can be played up to 8 draws (4 weeks) in advance.
Select the Power Play feature (an additional $1 per play) for a chance to multiply winnings.
Check playslip carefully before handing it to the retailer. POWERBALL TICKETS CANNOT BE CANCELLED.
Give completed playslip and cash to the retailer.
Receive, sign, and safeguard ticket. A ticket is needed to claim a prize. Playslips are not valid to claim a prize.
For each play, all six selected numbers are printed on one line of the ticket with the Powerball number printed to the right, under the word “POWER.”
Please click here for brochure.
Please click features and procedures for more details regarding this game.
Please click here for Powerball group rules.
HOW TO WIN POWERBALL:
|5 of 5 + Powerball||JACKPOT*||1:292,201,338|
|5 of 5||$1,000,000||1:11,688,054|
|4 of 5 + Powerball||$50,000||1:913,130|
|4 of 5||$100||1:36,526|
|3 of 5 + Powerball||$100||1:14,495|
|3 of 5||$7||1:580|
|2 of 5 + Powerball||$7||1:702|
|1 of 5 + Powerball||$4||1:92|
|0 of 5 + Powerball||$4||1:39|
|Drawings are Wednesday and Saturday at 9:59 p.m. Tickets must be purchased before 9 p.m. on Wednesday and Saturday to be included in that day’s drawing.|
Changes to the Powerball game rules came into effect on October 4th 2015 for the October 7th draw. The changes reduced the chances of a jackpot win and improved the chances of winning any other prize as the table below illustrates. The changes ensured that the Powerball jackpot grows faster and higher that it did prior to the October 7th 2015 draw.
|Draws||Main Number Range||Powerball Number Range||Winning Jackpot Odds||Winning Any Prize Odds|
|Pre October 7th 2015||1 — 59||1 — 35||1 in 176 million||1 in 31.85|
|October 7th 2015 Onwards||1 — 69||1 — 26||1 in 292 million||1 in 24.87|
Some states have variations to certain aspects of the game; for example, the amount of time you have to claim your prize might depend on where you bought your ticket. The closing time for ticket sales changes between different states. Officially it can be anywhere from an hour or more before the draw takes place. California’s prize dividends are pari-mutuel meaning the prize amount will vary depending on the number of winners and tickets sold (this excludes the jackpot which is the same as the national publicised jackpot). To be clear, the game play is exactly the same from state to state.
Contrary to popular belief, the official Powerball site stipulates that non-residents of the United States can participate in the Powerball lottery.
Canadians can participate in the Powerball lottery by using an online lottery service – a relatively new phenomenon that gives players access to numerous lottery games no matter where they’re based. It’s important to note that any online lottery service linked to or from Powerball.ca has been tested and vetted by the Powerball.ca editorial staff.
Prizes and Odds of Winning
You must match all five numbers and the PowerBall to win the jackpot, but you can win a prize even for just matching the PowerBall on its own. The table below shows how many numbers you need to match to win in each prize division, as well as the odds of winning:
|Prize Division||Numbers Matched||Odds of Winning*||Percentage of Prize Pool||Average Prizefor the past 365 days’ draws|
|1||5 + PowerBall||1 in 42,375,200||70.73%||R54,694,796.03|
|2||5||1 in 2,230,274||5.19%||R198,610.81|
|3||4 + PowerBall||1 in 188,334||3.25%||R19,534.23|
|4||4||1 in 9,912||5.51%||R1,080.60|
|5||3 + PowerBall||1 in 4,280||6.23%||R518.38|
|6||3||1 in 225||5.19%||R22.23|
|7||2 + PowerBall||1 in 299||3.9%||R22.02|
|8||1 + PowerBall||1 in 57||Fixed R15||R15.00|
|9||PowerBall Only||1 in 35||Fixed R10||R10.00|
The prizes in the eighth and ninth division are fixed at R15 and R10 respectively. The prizes in the upper seven divisions are pari-mutuel, meaning each division receives a percentage of the total Prize Pool. Fixed prizes are paid out first, with the remainder of the Prize Pool divided between the seven other divisions according to the percentages in the table. The value of a prize in these divisions can vary, depending on how many winners there are and how much money is in the Prize Pool.
Do you think you’ve won a PowerBall prize? Visit the How to Claim page to find out more about claiming prizes, whether you played online, with your bank or through a retailer.
How Will You Know When You Win the Powerball Lottery?
To find out if you’ve won a Powerball prize, you need to check your numbers. If you are contacted by someone telling you you’ve won a jackpot, you’re probably dealing with a lottery scam.
Many television stations broadcast the Powerball drawings live. You can also check your local newspaper or Google for the results online.
You can bring your ticket to a gas station, convenience store, or other location which sells tickets, to let them check your winnings for you. Just be sure to sign your ticket first, to avoid being scammed out of a win. It’s best to ask for the winning numbers and check yourself than to hand over your ticket and ask if you’ve won.
There are also lottery apps that make it easy to check winning numbers. Some will even notify you if the tickets you have purchased come up as winners.
If you want to check the winning numbers online, see my list of winning lottery numbers by state for the right links.
PowerPlay is your chance to boost any non-jackpot prizes you win and it only costs an extra US $1 per ticket. The Power Play is drawn using a random number generator (RNG). One selection is made from a pool of 42 balls, each marked with a multiplier amount: 24 marked 2x, 13 marked 3x, three marked 4x, two marked 5x, and a single 10x multiplier which is added as well if the jackpot for that draw is below US $150 million.
If you win a non-jackpot prize in the main draw, and have selected the Power Play option on your ticket, then you are guaranteed to have your prize increased according to the multiple on the ball drawn — up to an impressive 10x. The only exception to this is if you match five numbers, when the increased prize is fixed at US $2 million.
Check your numbers
If I live in a state that taxes prizes, but bought my ticket in a state with no tax on prizes, do I still need to pay state tax?
Yes, you do. Think of lottery prizes as regular earned income from a job. Just because you may work in a different state, that doesn’t permit you to get away with not paying state income tax in your state of residence. The lottery works the same way.
Whether it’s income from a job or income from gambling, the state where the money is won will tax the prize first at their out-of-state tax rate (assuming the state taxes lottery winnings). If your state of residence has the same or lower tax rate, then you won’t owe anything else. But if your state has a higher rate, you will get a credit for what you paid in the other state, and pay the difference to your state.
If the other state has no tax, you just pay the entire tax bill to your state.
The net result is that you end up paying whichever tax rate is higher between your state of residence and the state where you purchased the ticket. Of course, the tax law is quite complex and it’s possible that some condition or arrangement exists between the two states and a good tax attorney and/or accountant could discover a tax-saving loophole. That’s why we always recommend that major prize winners do not make any major decisions before first hiring a good legal and financial team.
One other option to consider, depending on how much in taxes you’re looking to save: the residency requirements as they relate to prize claims, state taxes, and income reporting. Since you aren’t responsible for paying taxes until you claim the prize, perhaps there is time to establish residency in the state where you purchased the ticket before the prize claim period expires. However, that is something you would definitely need to explore with an attorney before taking any action to assess the feasibility. You would also need to decide if it would be worth the risk of that important little piece of paper not getting lost, damaged, or destroyed in the time you spend arranging everything.
There exists proven mathematical strategies for increasing your odds of winning prizes in any lotto game.
The most successful technique for beating the lottery is “number wheeling”. Number wheeling significantly improves your chances of winning multiple prizes in every game you enter.
Although a strategy does not exist that can show you how to guarantee a jackpot win there are strategies available that can increase your chances of winning a jackpot prize enough to make playing in a syndicate a really good idea. You will definitely increase your chances of winning medium and small prizes by playing as a part of a syndicate that wheels its numbers.
Lottery syndicates win more often simply because they have more buying power to wheel more numbers. Syndicates that do not wheel their numbers have no more chance of winning than an individual player does though. So your syndicate must wheel their numbers.
The more numbers you wheel, the higher your chances of winning prizes but the more tickets you will need to buy.
So that is why it is always a good idea to join a syndicate or start your own.
These powerful powerball strategies have been proven to work consistently and if used correctly can increase your chances of winning multiple times in multiple games on a consistent basis.
Once you are in a syndicate start by identifying a large amount of hot numbers from which you will pick a selection of numbers to play. The cost for entries will depend of the “wheel” you are using which in turn depends on the amount of hot numbers you choose.
The more numbers you wheel the better. More numbers wheeled means your odds will increase.
Have your syndicate members pool their ticket money together and wheel your numbers to guarantee you win. Keep your numbers and play them on a consistent basis. When you learn how to wheel you will know how to win powerball prizes on a consistent basis. So learn to do it now!
How to Win Powerball Prizes Using 1 Weird Technique
So, what is the one simple but weird technique for winning the lottery?
It is number wheeling and it works!
Try it out for yourself and you’ll be amazed at how much more “lucky” you get.
How Much Does It Cost to Play Powerball?
Basic Powerball cards cost $2 apiece. For an additional dollar, you can add the PowerPlay option, which increases the size of your prize if you correctly guess one to five qualifying numbers. So the maximum cost of a single Powerball ticket is $3.
How Does PowerPlay Work?
If you purchase the PowerPlay option, the value of any prize you win for matching fewer than five balls will be multiplied by a randomly-drawn value between two and five. If the jackpot is worth less than $150 million, a 10x multiplier will be added to the mix.
For the payouts for matching five or six balls, the PowerPlay option works differently. The million-dollar prize that’s awarded for matching five white balls without the PowerBall is always doubled to $2 million with the PowerPlay option. The other multipliers don’t come into play.
The PowerPlay doesn’t affect the size of the jackpot, which is fixed whether you purchase the PowerPlay option or not. No multipliers apply to jackpot payouts.
How Powerball Drawings Work
In order to win the jackpot, players must correctly match all five white balls as well as the red Powerball.
There’s no guarantee that a jackpot will be awarded in every drawing. If no one picks all six winning numbers, the jackpot rolls over to the next drawing.
As jackpot values soar, more and more people buy tickets, so a larger percentage of the possible number combinations are sold. Eventually, it becomes nearly impossible for a drawing to occur without a winner.
The Powerball Lottery’s jackpot starts at $40 million and grows by at least $10 million each time the jackpot is not awarded. The jackpot can, and often does, reach values of hundreds of millions of dollars. As of 2016, the largest lottery jackpot in the history of the world was a Powerball jackpot worth over $1.5 billion dollars.
But there’s more to Powerball than just the jackpot prizes. In every drawing, other cash prizes worth between $4 and $2,000,000 are also awarded. The value of the prizes depends on how many numbers a player has guessed correctly, and the number of prizes awarded in each drawing is limited only by how many people make correct guesses.
Go For Medium & Small Wins
When you wheel numbers in any lottery draw you give yourself multiple chances of winning multiple prizes. For example, if you are fortunate enough to pick all the correct numbers then you will win much more than just the 1 jackpot prize. Because the winning numbers you chose will come up on multiple lines (because you wheeled your numbers) you will have multiple entries with different combinations of those numbers on it. Thus you will win the jackpot, plus additional prizes.
For example, if you wheel 8 numbers and 6 of your numbers are in the winning numbers in a 6 from 49 game you will win 1 jackpot prize, plus at least 1 match 5 prize, multiple match 4 prizes and multiple match 3 prizes – thus increasing your overall winnings.
Obviously you will be more likely to only pick 5, 4 or 3 correct numbers but the principle remains the same; you will win multiple prizes and not just 1 when you have enough winning numbers in your wheel that would win only one prize for someone who is not wheeling their numbers.
This is where the power of wheeling truly lies because you can win multiple small and medium prizes by matching only a few correct numbers. And, when you can do this consistently over many games you can build up your profits nicely. If you reinvest a portion of your winnings so you can wheel even more numbers you can quickly start earning good regular money from your lotto plays.
This is how to win the lottery powerball prizes that can make you rich in the long-term rather than relying on just 1 jackpot win. Rather than winning one massive prize you can win multiple smaller prizes and win them consistently over weeks, months and even years.