Tennessee lottery taxes: federal tax only
Tennessee repealed its last tax on investment income, so the state now has no personal income tax at all. Tennessee Education Lottery winners pay federal tax only.
Take-home pay on a lump-sum prize in Tennessee
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 total federal bill is closer to 37%, so you will owe more at filing time.
Neighbors who buy in Tennessee
Tennessee borders eight states. Residents of Kentucky, Georgia, Virginia and others who win with a Tennessee ticket will not pay Tennessee tax, but they will pay their home state's tax.
Where the money goes
Tennessee Lottery proceeds fund education programs, including college scholarships. This does not change your tax bill, but it is why the lottery is branded as an education lottery.
Common questions
Does Tennessee tax lottery winnings?
No. Tennessee has no personal income tax.
How much do I keep from a $10 million cash prize in Tennessee?
About $6.3 million at the top federal rate of 37%.