State-by-State Powerball Tax Guide 2026: Every Rate, Every Rule

The 9 states with zero Powerball tax

Nine states do not tax Powerball winnings at the state level. Buying a ticket here means only federal taxes apply — 24% withholding plus the top-bracket adjustment. On a $1B jackpot taken as cash ($600M gross), the take-home is approximately $378M.

California is unique: it has a state income tax (up to 13.3%) but specifically exempts in-state lottery winnings. The other eight states simply have no state income tax at all.

Low-tax states (under 4%)

States in this bracket take a relatively small bite — under 4% of the gross payout. On a $1B jackpot cash option ($600M), the state tax ranges from roughly $18M (at 3.07% in Pennsylvania) to $23M (at 3.80% in Iowa), leaving take-home around $355M–$360M after all taxes.

Arizona stands out for its flat 2.50% rate adopted in 2023, while North Dakota's 2.50% top rate makes it the lowest among states that do levy an income tax on lottery winnings.

Mid-tax states (4%–7%)

The majority of U.S. states fall in the 4%–7% range. Combined with federal taxes, the effective total tax rate on a large jackpot in these states is typically 38%–42%. On a $1B cash option ($600M), take-home ranges from roughly $330M to $355M.

Key states in this group include Illinois (flat 4.95%), Georgia (flat 5.49%), and Virginia (5.75% top rate). Many of these states use a flat income tax rate that simplifies the calculation.

High-tax states (7%–10%)

Six states push above the 7% mark, making them notably expensive for lottery winners. Combined with federal taxes, the effective rate exceeds 42–44%. On a $1B cash option, take-home drops below $330M.

Wisconsin (7.65%), Vermont (8.75%), and Maryland (8.75%) are all in this category. Maryland is especially punitive for non-residents, who face an additional local surtax.

Highest-tax states (10%+)

Only two states breach the 10% threshold: New Jersey at 10.75% and New York at 10.90%. New York City residents face an additional 3.876% city tax (not modeled by our calculator), which pushes the combined state+city rate to nearly 14.8%. On a $1B cash option, take-home in New York state is approximately $282M — nearly $100M less than in a zero-tax state.

These states represent the maximum state-level cost of winning. If you buy a ticket in New York, you are effectively paying $100M more in taxes than if you bought the same ticket in Florida or Texas.

Cross-state rules: where you buy vs. where you live

State lottery tax is determined by the state where the ticket was sold, not the winner's state of residence. A New York resident who buys a ticket in Florida owes $0 in state lottery tax to Florida — but must still report the winnings on their New York state return and pay New York's 10.90% rate.

Conversely, a Florida resident who buys a ticket in New York will have 10.90% withheld by New York's lottery commission. Since Florida has no income tax, the winner cannot credit that withholding against a home-state liability — the 10.90% is simply gone.

The general rule: you owe tax to the state that sold the ticket AND to your state of residence. Most states offer a credit for taxes paid to the selling state, but the net result is you pay whichever rate is higher. Always consult a CPA before claiming a large prize across state lines.

How to use the state tax calculators

We maintain individual tax calculator pages for every U.S. state with detailed breakdowns, neighbor-state comparisons, and state-specific FAQs. Enter any advertised jackpot to see cash-vs-annuity take-home for that state. Each page links to relevant IRS publications and the state's lottery commission.

Use the state tax hub at /tax to browse all 50 states sorted by rate, or jump directly to any state's dedicated page from the navigation.