South Carolina lottery taxes: 5.21% in 2026
Rate checked on November 5, 2026 against the sources listed at the end of this page.
South Carolina rewrote its income tax brackets in 2026. Under Act 110 of 2026, as explained in the Department of Revenue's Information Letter #26-20, there are now two brackets for tax years beginning after 2025: 1.99% on taxable income under $30,000 and 5.21% from $30,000 up. The top rate in 2025 was 6%.
A lottery prize is ordinary taxable income, so almost all of a large prize is taxed at 5.21%.
Take-home pay on a lump-sum prize in South Carolina
The table applies the top federal rate of 37% plus 5.21% South 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 | −$52,100 | $577,900 |
| $10.00M | −$3.70M | −$521,000 | $5.78M |
| $100.00M | −$37.00M | −$5.21M | $57.79M |
| $500.00M | −$185.00M | −$26.05M | $288.95M |
| $1.00B | −$370.00M | −$52.10M | $577.90M |
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 starts at $500
South Carolina withholds state tax much earlier than the federal $5,000 line. S.C. Code section 12-8-530 requires withholding on cash prizes and winnings of $500 or more, paid to residents and nonresidents, at "a percentage equal to the maximum individual tax rate". For 2026 that points to 5.21%.
Two caveats. We could not open a South Carolina Education Lottery page that states the percentage it withholds in 2026, so check with the SC Education Lottery when you claim. And because the cut was enacted during 2026 and applies to the whole year, a prize paid early in 2026 may have been withheld at the old 6%. If so, the extra withholding comes back as a credit when you file your 2026 return.
Nonresidents
The same statute covers nonresidents: a prize over $500 from a South Carolina ticket is South Carolina income, whoever wins it. Residents of Georgia and North Carolina who buy across the line should also read our Georgia and North Carolina guides and ticket state vs home state.
Local taxes
South Carolina has no city or county income tax.
More cuts are possible
From the 2027 tax year, further rate cuts are triggered by revenue growth, according to the Department of Revenue. Annuity winners should check each year's rate; a payment received in a later year may be taxed at a lower rate than 5.21%.
Common questions
What is South Carolina's tax rate on lottery winnings in 2026?
The top rate of 5.21% (Act 110 of 2026), down from 6% in 2025.
When does South Carolina withhold state tax from a lottery prize?
On prizes of $500 or more, for residents and nonresidents, at the maximum individual rate (S.C. Code 12-8-530). Check the exact 2026 percentage with the SC Education Lottery.
How much of a $10 million cash prize would I keep in South Carolina?
About $5.78 million after 37% federal and 5.21% state tax.
Sources
- IRS Topic 419: Gambling income and losses
- IRS Instructions for Forms W-2G and 5754
- SC Department of Revenue: Information Letter #26-20, 2026 tax computation (1.99% / 5.21%, PDF)
- South Carolina Code, Title 12 Chapter 8: section 12-8-530, withholding on prizes of $500 or more
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