New Jersey lottery taxes: nothing up to $10,000, up to 10.75% above
Rate checked on November 3, 2026 against the sources listed at the end of this page.
New Jersey has two lottery rules that surprise people. First, a New Jersey Lottery prize of $10,000 or less is not taxable at all, prize by prize. Second, once a prize is above $10,000, the whole prize is taxed as income, and for a jackpot that means the 10.75% rate on income over $1 million.
That makes New Jersey one of the most expensive states to win a big jackpot, second only to New York in our tables.
Calculate a New Jersey jackpot
Take-home pay on a lump-sum prize in New Jersey
The table applies the top federal rate of 37% plus 10.75% New Jersey 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 | −$107,500 | $522,500 |
| $10.00M | −$3.70M | −$1.07M | $5.22M |
| $100.00M | −$37.00M | −$10.75M | $52.25M |
| $500.00M | −$185.00M | −$53.75M | $261.25M |
| $1.00B | −$370.00M | −$107.50M | $522.50M |
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 $10,000 line
The Division of Taxation says New Jersey Lottery winnings from prizes over $10,000 are taxable, and that the test applies to each individual prize, not your yearly total. Ten separate $5,000 prizes are not taxable; one $11,000 prize is. The same standard covers Powerball and Mega Millions prizes from New Jersey tickets.
What is withheld when you claim
- 5% on New Jersey Lottery payouts from $10,001 to $500,000.
- 8% on payouts over $500,000.
- 8% on payouts over $10,000 if you do not give a valid taxpayer ID.
Withholding applies to the whole payout, not just the part above $10,000. On a jackpot, 8% withheld is well short of the 10.75% top rate, so plan for a state balance as well as the federal one (24% withheld vs up to 37% owed).
Why the top rate applies to a jackpot
New Jersey's graduated rates top out at 10.75% on income over $1 million, a rate that has applied since January 1, 2020. A multi-million-dollar prize puts almost all of it in that bracket, so our table and calculator use 10.75%. For a prize near $1 million the real New Jersey tax is lower.
Out-of-state tickets and nonresidents
The $10,000 exemption only covers the New Jersey Lottery. The Division of Taxation says out-of-state lottery winnings are taxable for New Jersey residents regardless of the amount. So a New Jersey resident who wins $2,000 with a Pennsylvania or New York ticket owes New Jersey tax on it.
Nonresidents who win New Jersey Lottery prizes over $10,000 are taxed by New Jersey too. New Yorkers and Pennsylvanians who buy in New Jersey should read ticket state vs home state, our New York guide and our Pennsylvania guide.
Sharing or assigning a prize
New Jersey follows the federal treatment for donated, split or assigned winnings: they are taxed to the person who receives them as they would be federally. See our guide to giving lottery winnings away.
Common questions
Is a $5,000 New Jersey Lottery prize taxable in New Jersey?
No. New Jersey Lottery prizes of $10,000 or less are not subject to New Jersey income tax. They are still taxable federally.
How much does New Jersey withhold on a jackpot?
8% on payouts over $500,000. The final tax at the top rate is 10.75%, so expect to owe more when you file.
How much of a $100 million cash prize would I keep in New Jersey?
About $52.25 million after 37% federal and 10.75% state tax.
Sources
- IRS Topic 419: Gambling income and losses
- IRS Instructions for Forms W-2G and 5754
- NJ Division of Taxation: Lottery and gambling winnings (updated September 28, 2026)
- NJ Division of Taxation: 10.75% rate on income over $1 million (updated April 8, 2025)
- NJ-1040 instructions, tax year 2025 (lottery winnings over $10,000)