Michigan lottery taxes: 4.25% state tax in 2026
Rate checked on November 3, 2026 against the sources listed at the end of this page.
Michigan's income tax rate can change from year to year: a state formula can lower it when revenue grows fast enough. On April 15, 2026 the Michigan Department of Treasury announced that the rate for tax year 2026 stays at 4.25%.
Michigan Treasury says gambling and lottery winnings are subject to Michigan income tax to the extent they are included in your federal adjusted gross income, so a Michigan resident's jackpot is taxed at that 4.25% rate.
Take-home pay on a lump-sum prize in Michigan
The table applies the top federal rate of 37% plus 4.25% Michigan 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 | −$42,500 | $587,500 |
| $10.00M | −$3.70M | −$425,000 | $5.88M |
| $100.00M | −$37.00M | −$4.25M | $58.75M |
| $500.00M | −$185.00M | −$21.25M | $293.75M |
| $1.00B | −$370.00M | −$42.50M | $587.50M |
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.
The rate can move from year to year
Because Michigan sets its rate each year, an annuity winner may see different state rates on different payments. Each payment is taxed at the rate for the year it is received. Check the current year's rate before you file.
City income taxes
Several Michigan cities levy their own income tax on residents. Whether and how a city taxes a lottery prize depends on that city's rules, so ask your city tax office before you claim. Our calculator and the table below include the state rate only.
Withholding when you claim
Federal tax of 24% is withheld on prizes over $5,000. Ask the Michigan Lottery what state and city tax it will withhold on your prize, and treat any amount withheld as a down payment, not the final bill.
Gambling losses and the $300 rule
Since 2021, Michigan lets you deduct casual gambling losses on your Michigan return if you itemized and deducted them federally. Michigan Treasury also notes that the first $300 of gambling or prize winnings can be excluded from "total household resources" when you claim Michigan's homestead property tax and similar credits. Neither changes much for a jackpot winner, but both matter for smaller prizes.
Nonresidents
If you live in Ohio, Indiana or Wisconsin and win with a Michigan ticket, Michigan's rules for nonresidents apply, and your home state may also tax the prize. See ticket state vs home state and our Ohio guide.
Common questions
What is Michigan's tax rate on lottery winnings for 2026?
4.25%, Michigan's individual income tax rate for tax year 2026, as announced by the Michigan Department of Treasury on April 15, 2026.
Do Detroit residents pay more?
Detroit and several other Michigan cities have their own income tax. Ask your city tax office how it treats a lottery prize; our figures include state tax only.
How much of a $10 million cash prize would I keep in Michigan?
About $5.88 million after 37% federal and 4.25% state tax, before any city tax.