Two different numbers
When a prize over $5,000 is paid, the lottery withholds 24 percent and sends it to the IRS. That is a statutory withholding rate. It is not a calculation of what you owe.
What you owe is worked out on your return, at the ordinary income rates. For 2026 those run to 37 percent, which starts at $640,600 of taxable income for a single filer and $768,700 for a married couple filing jointly. A jackpot clears that on the first day.
What the gap looks like
Take the $96.3 million cash option on the current jackpot, for a single filer:
- Withheld at 24 percent: about $23.1 million
- Actually owed federally: about $35.6 million
- Still due when you file: about $12.5 million
That last line is the one that goes missing. A calculator that subtracts 24 percent and stops has overstated the take home by twelve and a half million dollars, and the winner finds out in April.
Why it matters more than it sounds
The money is not lost, it was always owed. But people make decisions in the gap: gifts, property, promises to family. Treating the post withholding figure as spendable is how winners end up borrowing against a prize they have already been taxed on.
State tax sits on top
Federal is only half of it. Nine states take nothing, California exempts lottery winnings outright, and New York takes 10.9 percent with New York City adding 3.876 percent on top of that. Where the ticket was bought matters as much as where you live.