How much in taxes is withheld from each Lottery prize?
We are required by law to withhold both state and federal taxes on certain levels of Lottery prizes. Here is the most common situation: For U.S. citizens furnishing Social Security numbers, we are required by law to withhold 10% state tax and 25% federal tax from any prize more than $5,000. However, there are other situations where the above withholding differs. Here’s the law. We are always required to withhold 10% state tax on all prizes greater than $5,000. We are required to withhold 28% federal tax on any prize greater than $599 for U.S. citizens who don’t furnish Social Security or tax identification numbers. For non–residents of the U.S., we must withhold 30% federal tax on any prize greater than $599. At the end of the year, we mail each winner who has won $600 or more a W-2G form to use when filing his or her taxes.
