South Dakota lottery taxes: federal tax only
South Dakota does not have a personal income tax. Powerball and Mega Millions prizes claimed by South Dakota residents are taxed only by the federal government.
Calculate a South Dakota jackpot
Take-home pay on a lump-sum prize in South Dakota
The table applies the top federal rate of 37% plus no state 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 | $0 | $630,000 |
| $10.00M | −$3.70M | $0 | $6.30M |
| $100.00M | −$37.00M | $0 | $63.00M |
| $500.00M | −$185.00M | $0 | $315.00M |
| $1.00B | −$370.00M | $0 | $630.00M |
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 is withheld when you claim
Prizes over $5,000 have 24% federal tax withheld. On a jackpot, the top federal rate is 37%, so expect to pay the rest when you file.
Trusts and planning
South Dakota is well known for its trust laws, and some large winners from other states use South Dakota trusts in their planning. A trust does not remove federal tax on the prize, but it can help with privacy and estate planning. Talk to a lawyer about whether it fits you.
Neighbors who buy in South Dakota
Residents of Minnesota, Iowa or Nebraska who win with a South Dakota ticket will not pay South Dakota tax, but their home state will tax the prize.
Common questions
Does South Dakota tax lottery winnings?
No. South Dakota has no personal income tax.
How much do I keep from a $10 million cash prize in South Dakota?
About $6.3 million at the top federal rate of 37%.