Michigan Lottery
Michigan Lottery Tax Calculator
Michigan taxes lottery winnings at its flat 4.25% and withholds that rate from prizes over $5,000 — from Michigan residents and out-of-state winners alike — while many Michigan cities add an income tax of their own.
Verified · tax year 2026
Michigan prize — results
Take-home
63.7% kept of $1,000,000
Annuity · 30 payments
Year 1 — → year 30 —
| Cash received | $1,000,000 |
|---|---|
| Federal income tax | −$320,000 |
| Tax to Michigan | $0 |
| Michigan tax | −$42,500 |
| Local income tax | $0 |
| You keep | $637,500 |
| Federal withholding (24%) | −$240,000 |
|---|---|
| State withholding | −$42,500 |
| Check you receive | $717,500 |
| Still owed when you file | $80,000 |
Data: IRS Rev. Proc. 2025-32 · state agencies, verified · what this leaves out
What the Michigan Lottery takes, by prize size
The Michigan Lottery’s claim instructions draw three lines. Up to $1,999.99 nothing is withheld. From $2,000 to $5,000 nothing is withheld, but the prize is reported to the IRS and the Michigan Department of Treasury. Above $5,000, U.S. citizens and resident aliens have 24% federal and 4.25% state withheld — $240,000 and $42,500 on a $1,000,000 prize — and that applies to winners from other states too.
Any prize of $1,000 or more is first checked against debts owed to the State of Michigan, which can take up to the whole prize.
City income tax
Detroit and a number of other Michigan cities levy their own income tax. Whether a city reaches a resident’s lottery winnings is set by that city’s ordinance, so the calculator asks for your city rate rather than assuming one. The 4.25% state rate itself can drop for a year if MCL 206.51’s revenue trigger is met at the January revenue conference.
Michigan at a glance
| State income tax on winnings | Up to 4.25% |
|---|---|
| Rate table used | 2026 (MCL 206.51) |
| Lottery | Michigan Lottery |
| State withholding at claim | 4.25% over $5,000 |
| Local tax | Michigan city income tax rate (if your city levies one) |
What Michigan winners should know
- The Michigan Lottery withholds nothing on prizes up to $5,000, then 24% federal and 4.25% state on everything above it — residents and out-of-state winners alike.
- Prizes of $1,000 or more are first reduced by any debt on record with the State of Michigan.
- Michigan’s 4.25% can be lowered for a year by the revenue trigger in MCL 206.51(1)(c), decided at the January revenue conference.
Michigan sources
- MCL 206.51 — Income tax rate — Michigan Legislature
- How to claim a prize by mail — tax withholding by prize amount — Michigan Lottery †
Agency: Michigan Department of Treasury. † read through a browser session (why). How the math works.