NC Education Lottery
North Carolina Lottery Tax Calculator
North Carolina’s flat income tax dropped to 3.99% for tax years after 2025, and that is the rate a North Carolina Education Lottery prize is taxed at in 2026.
Verified · tax year 2026
North Carolina prize — results
Take-home
64% kept of $1,000,000
Annuity · 30 payments
Year 1 — → year 30 —
| Cash received | $1,000,000 |
|---|---|
| Federal income tax | −$320,000 |
| Tax to North Carolina | $0 |
| North Carolina tax | −$39,900 |
| Local income tax | $0 |
| You keep | $640,100 |
| Federal withholding (24%) | −$240,000 |
|---|---|
| State withholding | not published |
| Check you receive | $760,000 |
| Still owed when you file | $119,900 |
Data: IRS Rev. Proc. 2025-32 · state agencies, verified · what this leaves out
One rate, falling on a schedule
The North Carolina Department of Revenue lists 4.25% for 2025 and 3.99% for every tax year after 2025, with further reductions from 2027 only if the revenue triggers in Session Law 2023-134 are met. A $1,000,000 prize claimed in 2026 therefore carries $39,900 of North Carolina tax. Since the rate is flat, filing status and other income do not change the state figure — only the federal one, which is $320,000 for a single filer with no other income.
At the claim center
The NC Education Lottery says prizes are subject to state and federal taxes and any other mandatory state withholdings, but it does not post the state withholding rate. The calculator marks it unpublished. South Carolinians and Virginians who buy across the line should note that both states tax their residents’ prizes, and Tennesseans have no state income tax at home.
North Carolina at a glance
| State income tax on winnings | Up to 3.99% |
|---|---|
| Rate table used | Tax years after 2025 |
| Lottery | NC Education Lottery |
| State withholding at claim | Rate not published |
| Scheduled change | Rates for 2027 and later can fall further only if the S.L. 2023-134 revenue triggers are met. |
What North Carolina winners should know
- North Carolina’s flat rate fell from 4.25% (2025) to 3.99% for tax years after 2025.
North Carolina sources
- Tax Rate Schedules — North Carolina Department of Revenue †
Agency: North Carolina Department of Revenue. † read through a browser session (why). How the math works.