North Dakota Lottery
North Dakota Lottery Tax Calculator
North Dakota has one of the lowest income taxes of any state that has one — a top rate of 2.5% — and the North Dakota Lottery withholds exactly that 2.5% from winnings over $5,000.
Verified · tax year 2026
North Dakota prize — results
Take-home
65.5% 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 Dakota | $0 |
| North Dakota tax | −$25,000 |
| Local income tax | $0 |
| You keep | $655,000 |
| Federal withholding (24%) | −$240,000 |
|---|---|
| State withholding | −$25,000 |
| Check you receive | $735,000 |
| Still owed when you file | $80,000 |
Data: IRS Rev. Proc. 2025-32 · state agencies, verified · what this leaves out
Small state tax, mostly federal bill
On a $1,000,000 prize the federal tax ($320,000) is more than ten times the North Dakota tax. North Dakota’s simplified schedule in N.D.C.C. § 57-38-30.3 has three bands — 0%, 1.95% and 2.5% — and the Lottery withholds the top rate, $25,000 here. This calculator applies 2.5% to the whole prize ($25,000), an upper bound, because the 2026 indexed band limits could not be confirmed from the Tax Commissioner today; the overstatement is at most a few thousand dollars.
Minnesotans and Montanans in Fargo and Williston
Residents of Minnesota and Montana often buy tickets in North Dakota. They are withheld the same 2.5%, and their home states then tax the prize at far higher rates — Minnesota up to 9.85%, Montana up to 5.65% in 2026 — so for them North Dakota’s low rate does not lower the overall bill.
North Dakota at a glance
| State income tax on winnings | Top rate 2.5% |
|---|---|
| Rate table used | Top rate (2026 indexed thresholds not retrievable today) |
| Lottery | North Dakota Lottery |
| State withholding at claim | 2.5% over $5,000 |
What North Dakota winners should know
- North Dakota’s three-band schedule (0%, 1.95%, 2.5%) is among the lowest of any income-tax state, and the Lottery withholds the 2.5% top rate.
- Because the 0% and 1.95% bands are not applied here, the North Dakota figure shown is an upper bound by at most a few thousand dollars.
North Dakota sources
- N.D.C.C. § 57-38-30.3 — Simplified method of computing tax — North Dakota Legislative Branch
- Claim Your Prize — North Dakota Lottery †
Agency: North Dakota Office of State Tax Commissioner. † read through a browser session (why). How the math works.