Minnesota lottery taxes: 9.85% owed, 7.25% withheld
Rate checked on November 4, 2026 against the sources listed at the end of this page.
Minnesota has one of the highest top income tax rates of any state that taxes lottery prizes: 9.85% for 2026. Brackets are indexed every year, but a jackpot is far above the top bracket in any year.
The withholding rate, by contrast, is fixed in law at 7.25% (Minnesota Statutes section 290.92, subdivision 29). The gap between the two is the surprise bill many Minnesota winners do not expect.
Take-home pay on a lump-sum prize in Minnesota
The table applies the top federal rate of 37% plus 9.85% Minnesota 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 | −$98,500 | $531,500 |
| $10.00M | −$3.70M | −$985,000 | $5.32M |
| $100.00M | −$37.00M | −$9.85M | $53.15M |
| $500.00M | −$185.00M | −$49.25M | $265.75M |
| $1.00B | −$370.00M | −$98.50M | $531.50M |
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 2.6% gap
On prizes over $5,000 the Minnesota Lottery withholds 24% federal and 7.25% state tax, 31.25% in all. The real bill on a jackpot is up to 37% federal and 9.85% state. On a $10 million cash prize, that means about $260,000 of Minnesota tax (2.6%) still due at filing, plus the federal balance. Set it aside before you spend anything.
Nonresidents pay Minnesota tax
Minnesota assigns winnings on a bet made in Minnesota to Minnesota (section 290.17, subdivision 2). A Wisconsin, Iowa or Dakotas resident who wins with a ticket bought in Minnesota owes Minnesota tax on it. South Dakota and North Dakota residents should note this: South Dakota does not tax lottery prizes at home, but a Minnesota ticket is still taxed by Minnesota. See our South Dakota and Wisconsin guides and ticket state vs home state.
Nonresident aliens have 30% federal and 7.25% state tax withheld on prizes over $5,000, according to the Minnesota Lottery.
Local taxes
Minnesota has no local income tax.
Common questions
What is Minnesota's tax rate on lottery winnings in 2026?
Prizes are taxed at Minnesota's graduated rates; a jackpot is taxed at the top rate of 9.85%.
How much does the Minnesota Lottery withhold?
24% federal and 7.25% state on prizes over $5,000, 31.25% in all. The state part is set by Minn. Stat. 290.92.
How much of a $100 million cash prize would I keep in Minnesota?
About $53.15 million after 37% federal and 9.85% state tax.
Sources
- IRS Topic 419: Gambling income and losses
- IRS Instructions for Forms W-2G and 5754
- Minnesota Department of Revenue: Income tax rates and brackets (2026 top rate 9.85%)
- Minn. Stat. 290.92: withholding (subd. 29, 7.25% on lottery winnings)
- Minn. Stat. 290.17: assignment of income (winnings on bets made in Minnesota)
- Minnesota Lottery: Claim a prize (31.25% withheld over $5,000)
Calculate for Minnesota: Powerball · Mega Millions · any prize amount