How the calculator works

1. Federal income tax on the prize

A lottery prize is ordinary income. The engine computes your federal tax twice — once on your other income alone and once with the prize added — and reports the difference. That captures exactly which brackets the prize fills. Both computations subtract the larger of the 2026 standard deduction ($16,100 single or separate, $24,150 head of household, $32,200 joint) or the itemized deductions you enter, after the new § 68 limitation that trims itemized deductions by 2/37 for income in the 37% bracket. Brackets come from Rev. Proc. 2025-32 for all four filing statuses.

2. State tax

State tax is also computed as the increase caused by the prize, stacked on your other income, using that state’s own structure: plain brackets, Arkansas’ rate-minus-adjustment table, Connecticut’s add-back and recapture tables, New York’s recapture worksheets and its flat 10.9% above $25 million of AGI, Ohio’s $332-plus-2.75% formula, and surtaxes in California, Maine and Massachusetts. Where only a state’s top rate could be verified for 2026 (Nebraska, North Dakota, Rhode Island, Vermont) the top rate is applied to the whole prize and the result is labeled an upper bound.

If the ticket was bought in another state, the selling state’s tax is computed on the prize alone and your home state’s tax is reduced by a credit equal to the smaller of the two. States that do not tax nonresidents (DC), prizes exempt at the source (California Lottery; New Jersey Lottery prizes of $10,000 or less) and states without income tax are handled explicitly.

3. Local tax

New York City (graduated) and Yonkers (16.75% of state tax) are modeled. Maryland counties use the 2026 rates the Comptroller publishes; Anne Arundel and Frederick, which are graduated, use their 3.20% top rate as an upper bound. Indiana, Michigan and Ohio local taxes vary by locality, so you enter your own rate.

4. Annuity

Powerball and Mega Millions annuities are one payment now and 29 annual payments, each 5% larger. The first payment is jackpot × 0.05 ÷ (1.05³⁰ − 1); the rest follow. Each payment is taxed as if received under the current year’s law with your current other income. Future brackets will be indexed and some state laws are already scheduled to change; state pages list those changes.

5. Withholding and the check you receive

Federal withholding is 24% of prizes over $5,000. State withholding follows the selling lottery’s published rule — rate, trigger and resident or nonresident status. When a lottery does not publish its rate, the result says so instead of assuming one. “Still owed when you file” is total tax minus both withholdings.

What the calculator leaves out

• State standard deductions, personal exemptions and credits other than the credit for tax paid to another state. Because the prize is stacked on income before state deductions, the state figure is usually a little higher than your actual state tax.
• The federal deduction for state and local taxes (capped and phased down for high incomes), the alternative minimum tax and the net investment income tax (which does not apply to winnings).
• Underpayment penalties, interest on the cash you invest, and gift or estate tax.
• How a group, trust or LLC divides a prize; enter your own share.
• State-specific treatment of gambling losses; enter the deductible amount yourself.

6. Years without published brackets

Every rule set carries a validity window. 2026 rules are valid through December 31, 2026. The IRS normally publishes the next year’s brackets in the fall; until it does, choosing 2027 switches the calculator to an explicit mode where you enter the federal and state rates yourself. A test in the build fails 45 days before any window ends without a verified successor, so a stale year cannot slip through silently.

Corrections and questions go through the contact form; the editorial policy explains how figures are checked and updated.