Vermont Lottery
Vermont Lottery Tax Calculator
Vermont withholds 6% from lottery winnings over $5,000, while its top 2026 income tax rate is 8.75% — leaving close to three percent of a large prize to settle with the state.
Verified · tax year 2026
Vermont prize — results
Take-home
59.3% kept of $1,000,000
Annuity · 30 payments
Year 1 — → year 30 —
| Cash received | $1,000,000 |
|---|---|
| Federal income tax | −$320,000 |
| Tax to Vermont | $0 |
| Vermont tax | −$87,500 |
| Local income tax | $0 |
| You keep | $592,500 |
| Federal withholding (24%) | −$240,000 |
|---|---|
| State withholding | −$60,000 |
| Check you receive | $700,000 |
| Still owed when you file | $107,500 |
Data: IRS Rev. Proc. 2025-32 · state agencies, verified · what this leaves out
The gap between 6% and 8.75%
The Vermont Lottery’s claim FAQ lists federal withholding of at least 24% and Vermont withholding of at least 6% on winnings over $5,000. Vermont’s 2026 rates run 3.35%, 6.60%, 7.60% and 8.75%. On a $1,000,000 prize the Lottery takes $60,000; this calculator applies 8.75% to the whole prize ($87,500) as an upper bound, because the 2026 bracket thresholds could not be confirmed in a form we could verify.
Missing taxpayer numbers
Vermont’s Lottery also withholds 24% federal and 6% state from winnings of $600 or more when the winner does not supply a correct taxpayer identification number. New Hampshire residents who buy across the river pay no home-state tax; New Yorkers and Massachusetts residents do.
Vermont at a glance
| State income tax on winnings | Top rate 8.75% |
|---|---|
| Rate table used | Top rate (2026 bracket thresholds not published in a form we could verify) |
| Lottery | Vermont Lottery |
| State withholding at claim | 6% over $5,000 |
What Vermont winners should know
- Vermont withholds 6% but its top rate is 8.75%, so a large Vermont prize leaves nearly 3% of the prize due at filing.
- Because Vermont’s lower brackets are not applied here, the Vermont figure is an upper bound; the gap is largest for prizes under about $250,000.
Vermont sources
- GB-1210-2026 Vermont Income Tax Withholding Instructions, Tables and Charts — Vermont Department of Taxes
- What if I win? — Vermont Lottery †
Agency: Vermont Department of Taxes. † read through a browser session (why). How the math works.