Colorado Lottery
Colorado Lottery Tax Calculator
The Colorado Lottery withholds 4% for the state on prizes of $5,001 or more, while Colorado’s 2026 income tax rate is 4.4% — so a big Colorado win leaves a small state balance to pay later.
Verified · tax year 2026
Colorado prize — results
Take-home
63.6% kept of $1,000,000
Annuity · 30 payments
Year 1 — → year 30 —
| Cash received | $1,000,000 |
|---|---|
| Federal income tax | −$320,000 |
| Tax to Colorado | $0 |
| Colorado tax | −$44,000 |
| Local income tax | $0 |
| You keep | $636,000 |
| Federal withholding (24%) | −$240,000 |
|---|---|
| State withholding | −$40,000 |
| Check you receive | $720,000 |
| Still owed when you file | $84,000 |
Data: IRS Rev. Proc. 2025-32 · state agencies, verified · what this leaves out
The 0.4% gap
Colorado taxes income at one flat rate. The Department of Revenue’s 2026 withholding worksheet uses 4.40%, but the Lottery’s claim instructions still take 4% — 28% in total with the 24% federal share. On a $1,000,000 prize the state withholding is $40,000, while the Colorado tax on the prize is $44,000. Plan for that difference along with the much larger federal balance of about $80,000.
TABOR can still move the rate
Colorado’s rate has changed almost every year — 4.55% in 2020, 4.5% in 2021, 4.4% in 2022 and 2023, 4.25% for 2024 and 4.4% again for 2025 — partly because the TABOR refund statute temporarily cuts the rate in surplus years. Whether that happens for 2026 is decided after the year closes, so the 4.4% used here is the rate on the books today, not a forecast.
Out-of-state winners and foreign nationals who claim in Colorado are also withheld 4% for Colorado; foreign nationals face 30% federal withholding instead of 24%.
Colorado at a glance
| State income tax on winnings | Up to 4.4% |
|---|---|
| Rate table used | 2026 (DR 1098 rate; a TABOR-triggered temporary cut can lower it after year-end) |
| Lottery | Colorado Lottery |
| State withholding at claim | 4% over $5,000 |
What Colorado winners should know
- The Lottery withholds 4% but Colorado’s 2026 rate is 4.4%, so a large Colorado prize normally leaves about 0.4% of the prize still owed at filing.
- Colorado has cut its rate temporarily in surplus years under the TABOR refund statute (4.25% for 2024); any 2026 cut is only known after the year closes.
- Non-residents and foreign nationals are withheld 4% state as well, plus 30% federal for foreign nationals.
Colorado sources
- DR 1098 — 2026 Colorado Withholding Worksheet for Employers (10/21/25) — Colorado Department of Revenue
- Individual Income Tax Guide — Colorado Department of Revenue
- Claiming Prizes — Colorado Lottery
Agency: Colorado Department of Revenue. † read through a browser session (why). How the math works.
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