Pennsylvania lottery taxes: a flat 3.07% on cash prizes
Rate checked on November 3, 2026 against the sources listed at the end of this page.
Pennsylvania has one of the simplest lottery tax setups in the country: one flat state rate of 3.07%, with no brackets. A $600 prize and a $600 million prize are taxed at the same state rate.
Older articles say Pennsylvania Lottery prizes are tax-free in Pennsylvania. That was true until the end of 2015. The Department of Revenue says Pennsylvania Lottery cash prizes paid on or after January 1, 2016 are taxable.
Calculate a Pennsylvania jackpot
Take-home pay on a lump-sum prize in Pennsylvania
The table applies the top federal rate of 37% plus 3.07% Pennsylvania 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 | −$30,700 | $599,300 |
| $10.00M | −$3.70M | −$307,000 | $5.99M |
| $100.00M | −$37.00M | −$3.07M | $59.93M |
| $500.00M | −$185.00M | −$15.35M | $299.65M |
| $1.00B | −$370.00M | −$30.70M | $599.30M |
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.
What Pennsylvania taxes, and what it does not
- Cash prizes from the Pennsylvania Lottery paid since January 1, 2016 are taxable at 3.07%, including annuity payments.
- Noncash Pennsylvania Lottery prizes, such as a car or a trip, are excluded for residents and nonresidents.
- Prizes from other states' lotteries are taxable for Pennsylvania residents, cash or noncash.
You can subtract the cost of Pennsylvania Lottery tickets bought in the same year from your winnings, according to the Department of Revenue's tax guide.
What is withheld when you claim
The Pennsylvania Lottery withholds Pennsylvania income tax whenever federal withholding is required, which for lottery prizes means prizes over $5,000. Because the state rate is flat, the 3.07% withheld is normally the full state tax on the prize. Federal withholding is 24%; a jackpot winner owes up to 37% in total federal tax and should set aside the difference.
Powerball and Mega Millions jackpots must be claimed in person at Lottery headquarters in Middletown. Draw-game prizes expire one year after the drawing date, according to the Pennsylvania Lottery's winners guide.
Nonresidents and cross-border tickets
Pennsylvania treats cash prizes from the Pennsylvania Lottery as Pennsylvania-source income, so a nonresident who wins with a ticket bought from a Pennsylvania retailer owes Pennsylvania tax on it. That includes many New Jersey, New York, Ohio, Maryland and Delaware residents who buy across the line. Their home state may tax the prize too; read ticket state vs home state.
The reverse also holds: a Pennsylvanian who wins with a New Jersey ticket owes Pennsylvania tax on it, and New Jersey taxes nonresident prizes over $10,000. See our New Jersey guide.
Local taxes
Pennsylvania's local earned income taxes are not covered here and are not included in our numbers. If you live in Philadelphia or another municipality with its own income tax, ask your local tax office whether it applies to a lottery prize.
Common questions
Are Pennsylvania Lottery winnings taxable in Pennsylvania?
Yes, cash prizes paid since January 1, 2016 are taxed at the flat 3.07% rate. Noncash Pennsylvania Lottery prizes are excluded.
How much do I keep from a $10 million cash prize in Pennsylvania?
About $5.99 million after the top federal rate (37%) and Pennsylvania's 3.07%.
How long do I have to claim?
For draw games such as Powerball and Mega Millions, one year from the drawing date, according to the Pennsylvania Lottery winners guide.
Sources
- IRS Topic 419: Gambling income and losses
- IRS Instructions for Forms W-2G and 5754
- Pennsylvania Department of Revenue: Personal Income Tax (3.07% rate)
- Pennsylvania Department of Revenue: Lottery winnings
- PA Personal Income Tax Guide: Gambling and Lottery Winnings
- Pennsylvania Lottery winners guide (PDF)