Montana lottery taxes: 5.65% in 2026
Rate checked on November 5, 2026 against the sources listed at the end of this page.
Lottery income uses ordinary brackets
The Department of Revenue HB-337 page lists 4.7% up to $47,500 for single filers or $95,000 jointly, and 5.65% above those amounts in 2026. Lottery winnings are ordinary income, so the separate capital gains rules do not set the jackpot rate.
Take-home pay on a lump-sum prize in Montana
The table applies the top federal rate of 37% plus 5.65% Montana 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 | −$56,500 | $573,500 |
| $10.00M | −$3.70M | −$565,000 | $5.74M |
| $100.00M | −$37.00M | −$5.65M | $57.35M |
| $500.00M | −$185.00M | −$28.25M | $286.75M |
| $1.00B | −$370.00M | −$56.50M | $573.50M |
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.
Withholding sources disagree
MCA 15-30-2522 requires withholding on proceeds over $5,000 at the highest marginal rate in effect. That points to 5.65% for 2026, but the Lottery FAQ still lists 5.9%. Check the actual deduction with the Montana Lottery before claiming and keep the W-2G for your return.
Looking ahead to an annuity
HB 337 schedules a 5.4% upper rate for 2027, above $65,000 single or $130,000 jointly. Our calculator uses the 2026 rate for all payments; it does not forecast future legislation.
Out-of-state winners
The withholding statute does not distinguish residents. We have not confirmed the nonresident filing rule on an official page; check with Montana Revenue if you live in neighboring Idaho or another state.
Common questions
Why does the Lottery FAQ still say 5.9%?
It appears to retain the previous rate. HB 337 sets the 2026 top rate at 5.65%; confirm withholding with the Lottery.
Sources
- IRS Topic 419: Gambling income and losses
- IRS Instructions for Forms W-2G and 5754
- 2026 brackets 4.7% / 5.65%, 2027 5.4%.
- Lottery withholding on proceeds over $5,000 at the highest marginal rate.
- Lottery FAQ: 5.9% state and 24% federal on prizes over $5,000 (not updated for 2026).
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