North Carolina lottery taxes: 3.99% in 2026
Rate checked on November 3, 2026 against the sources listed at the end of this page.
North Carolina has a flat income tax that has been coming down for years. The Department of Revenue lists 4.25% for 2025 and 3.99% for tax years after 2025, with further cuts possible from 2027 if revenue triggers are met.
North Carolina also withholds state tax much earlier than most states: from prizes of $600 or more, instead of the usual $5,000.
Calculate a North Carolina jackpot
Take-home pay on a lump-sum prize in North Carolina
The table applies the top federal rate of 37% plus 3.99% North Carolina 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 | −$39,900 | $590,100 |
| $10.00M | −$3.70M | −$399,000 | $5.90M |
| $100.00M | −$37.00M | −$3.99M | $59.01M |
| $500.00M | −$185.00M | −$19.95M | $295.05M |
| $1.00B | −$370.00M | −$39.90M | $590.10M |
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 from $600
Under North Carolina General Statutes section 105-163.2B, the North Carolina State Lottery Commission must withhold state income tax from winnings of $600 or more, at the state's individual income tax rate. Since that is the same flat rate you owe, state withholding on a large prize is close to the final North Carolina bill.
Federal withholding is different: it starts above $5,000 at 24%, and a jackpot is taxed at up to 37%. So a North Carolina winner usually has a federal balance to pay, but little or no state balance.
A falling rate and the annuity
If you take the annuity, each payment is taxed at the rate for the year it is paid. With North Carolina's rate on a downward path, later payments may be taxed at a lower state rate than today's. Our calculator uses the 2026 rate for every year.
Nonresidents and neighbors
North Carolina borders Virginia, Tennessee, Georgia and South Carolina. Tennesseans pay no state tax at home on lottery prizes, but a Tennessee resident who wins with a North Carolina ticket may still owe North Carolina tax. North Carolinians who buy in Virginia will have 4% Virginia tax withheld. See our Virginia, Georgia and Tennessee guides and ticket state vs home state.
Common questions
What is North Carolina's tax rate on lottery winnings?
3.99% for tax years after 2025, North Carolina's flat individual income tax rate.
When does the NC Lottery withhold state tax?
On winnings of $600 or more, at the individual income tax rate.
How much of a $10 million cash prize would I keep in North Carolina?
About $5.90 million after 37% federal and 3.99% state tax.