Iowa Lottery
Iowa Lottery Tax Calculator
Iowa withholds 3.8% — its single 2026 rate — from lottery prizes over $600, the lowest withholding trigger among the states checked here, and it does not exempt nonresident winners.
Verified · tax year 2026
Iowa prize — results
Take-home
96.2% kept of $1,000
Annuity · 30 payments
Year 1 — → year 30 —
| Cash received | $1,000 |
|---|---|
| Federal income tax | $0 |
| Tax to Iowa | $0 |
| Iowa tax | −$38 |
| Local income tax | $0 |
| You keep | $962 |
| Federal withholding (24%) | $0 |
|---|---|
| State withholding | −$38 |
| Check you receive | $962 |
| Still owed when you file | $0 |
Data: IRS Rev. Proc. 2025-32 · state agencies, verified · what this leaves out
Even modest prizes are withheld
Iowa’s withholding rules require 3.8% from lottery winnings in excess of $600, from pari-mutuel winnings over $1,000 and from casino slot jackpots over $1,200. A $1,000 Iowa Lottery prize therefore pays out $962 after $38 of state withholding; there is no federal withholding at that size, though the prize is still federally taxable.
Because 3.8% is now Iowa’s only rate, the amount withheld usually equals the Iowa tax on the prize.
Nonresidents get no refund by default
The Iowa Department of Revenue warns that nonresidents are not exempt from Iowa tax or withholding and usually will not receive a full refund of what was withheld. A Nebraskan or Illinoisan who wins in Iowa should expect to claim a credit at home rather than a refund from Iowa. The Iowa Lottery’s Powerball page describes the annuity as 30 payments over 29 years rising 5% a year.
Iowa at a glance
| State income tax on winnings | Up to 3.8% |
|---|---|
| Rate table used | 2026 |
| Lottery | Iowa Lottery |
| State withholding at claim | 3.8% over $600 |
What Iowa winners should know
- Iowa withholds 3.8% from any lottery prize over $600 — the lowest withholding trigger of any Powerball state checked here.
- The Iowa Department of Revenue warns that nonresidents are not exempt from Iowa tax or withholding and usually do not get the Iowa tax back.
Iowa sources
- Iowa Withholding Tax Information (tables effective January 1, 2026) — Iowa Department of Revenue
- Iowa Tax on Gambling — Iowa Department of Revenue
Agency: Iowa Department of Revenue. † read through a browser session (why). How the math works.
Neighboring states
Illinois · Minnesota · Missouri · Nebraska · South Dakota · Wisconsin