Nebraska lottery taxes: 4.55% in 2026
Rate checked on November 5, 2026 against the sources listed at the end of this page.
A scheduled cut, not a withholding rate
The Department of Revenue explains that LB 754 sets both upper brackets at 4.55% for 2026, with 3.99% scheduled for 2027. An annuity winner should check the rate for each payment year.
Take-home pay on a lump-sum prize in Nebraska
The table applies the top federal rate of 37% plus 4.55% Nebraska 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 | −$45,500 | $584,500 |
| $10.00M | −$3.70M | −$455,000 | $5.84M |
| $100.00M | −$37.00M | −$4.55M | $58.45M |
| $500.00M | −$185.00M | −$22.75M | $292.25M |
| $1.00B | −$370.00M | −$45.50M | $584.50M |
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.
Only 3.5% withheld
The 2026 Circular EN specifies 3.5% withholding on Nebraska-source gambling winnings subject to federal withholding. That includes Nebraska Lottery prizes and does not distinguish residents from nonresidents. On a large prize, the 1.05 percentage point gap below the top state rate can leave more to pay when filing.
Buying across the border
Residents of neighboring South Dakota should check Nebraska filing obligations before claiming a Nebraska ticket. Having no income tax at home does not remove tax on Nebraska-source winnings.
Common questions
What does Nebraska withhold?
The 2026 Circular EN specifies 3.5% on Nebraska-source gambling winnings subject to federal withholding.
Sources
- IRS Topic 419: Gambling income and losses
- IRS Instructions for Forms W-2G and 5754
- Nebraska Revenue: 2023 legislative changes, LB 754 (2026 rates)
- 2026 Circular EN: flat 3.5% withholding on Nebraska-source gambling winnings, including Nebraska Lottery (PDF text extracted).
Calculate for Nebraska: Powerball · Mega Millions · any prize amount