Colorado lottery taxes: 4.4% owed, 4% withheld
Rate checked on November 4, 2026 against the sources listed at the end of this page.
Colorado has a flat income tax. The Department of Revenue's 2026 estimated-tax form uses 4.4%, the same rate as 2025. The lower 4.25% rate you may see in older articles was a temporary cut for tax year 2024 only.
The detail that catches winners out is the gap between withholding and the real rate: the Colorado Lottery withholds 4%, not 4.4%.
Take-home pay on a lump-sum prize in Colorado
The table applies the top federal rate of 37% plus 4.4% Colorado tax. Amounts are the cash (lump-sum) value you receive, not the advertised annuity jackpot.
| Cash prize | Federal (37%) | State | You keep |
|---|---|---|---|
| $1.00M | −$370,000 | −$44,000 | $586,000 |
| $10.00M | −$3.70M | −$440,000 | $5.86M |
| $100.00M | −$37.00M | −$4.40M | $58.60M |
| $500.00M | −$185.00M | −$22.00M | $293.00M |
| $1.00B | −$370.00M | −$44.00M | $586.00M |
Federal figure is the total owed at the top bracket. At claim time only 24% is withheld; the rest is due when you file. Smaller prizes can fall into lower brackets, so the real federal bill may be less.
Withholding: 28% total, 4% of it for Colorado
For prizes of $5,001 or more, the Colorado Lottery withholds 24% federal and 4% state tax, 28% in all. The Department of Revenue's gambling withholding rule sets the same 4% for any winnings subject to federal withholding. On a $10 million prize, that leaves about $40,000 of Colorado tax (0.4%) to pay when you file, on top of the federal balance between 24% and 37%.
Nonresidents
The Colorado Lottery withholds the 4% state share from non-residents too; its claiming page lists 34% (30% federal plus 4% state) for non-residents and foreign nationals. Whether you then owe more Colorado tax, or get some back, as a nonresident filer is a question for the Colorado Department of Revenue. Your home state may also tax the prize; see ticket state vs home state.
Local taxes
Colorado has no county or city income tax. Denver, Aurora and a few other cities charge occupational privilege taxes, but those are flat monthly charges on wages, not a tax on winnings.
What could change: Amendment 87
Amendment 87 on the November 3, 2026 ballot would create a graduated income tax starting in 2027, according to the legislature's Blue Book. It does not change the 2026 rate. We will update this page once the result and any new rates are official.
Common questions
What is Colorado's tax rate on lottery winnings in 2026?
4.4%, Colorado's flat income tax rate, as used on the Department of Revenue's 2026 estimated-tax form.
Why is only 4% withheld?
Colorado's withholding rule for gambling winnings is 4%. The tax you owe is 4.4%, so you pay the 0.4% difference when you file.
How much of a $10 million cash prize would I keep in Colorado?
About $5.86 million after 37% federal and 4.4% state tax.
Sources
- IRS Topic 419: Gambling income and losses
- IRS Instructions for Forms W-2G and 5754
- Colorado DOR: DR 0104EP 2026, estimated tax at 4.4% (PDF)
- Colorado DOR: Individual income tax guide (rate history)
- Colorado DOR: Withholding tax topics, gambling winnings (4%)
- Colorado Lottery: Claiming prizes (24% + 4% withheld)
- Colorado Legislative Council: Blue Book, Amendment 87 (graduated tax from 2027)
Calculate for Colorado: Powerball · Mega Millions · any prize amount