Texas lottery taxes: you only pay federal tax
Texas does not have a personal income tax, which makes it one of the best states to win a jackpot. Whether you claim a Powerball, Mega Millions or Lotto Texas prize, the only tax on the prize itself is federal.
Take-home pay on a lump-sum prize in Texas
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
For prizes over $5,000 the lottery withholds 24% for federal tax. On a large jackpot, that is not enough: income above the top bracket threshold is taxed at 37%, so you will owe the difference when you file. Many winners put that extra 13% into a separate account the day the money arrives.
Staying private in Texas
Texas law lets winners of very large prizes keep their name out of public records. If privacy matters to you, ask the lottery about the current rules before you claim, and speak to a lawyer first.
Buying tickets in Texas
Texas sells Powerball and Mega Millions through licensed retailers. Online ticket couriers are not allowed to sell Texas Lottery tickets, so buy from a store. LotteryTaxHub does not sell tickets.
Moving after you win
If you live in Texas when you win, moving later does not change how the prize is taxed by Texas, because Texas has no income tax. If you move from a taxing state to Texas, the state you left may still tax prizes won while you lived there, including future annuity payments. Ask a tax professional before you move.
Common questions
Does Texas tax lottery winnings?
No. Texas has no personal income tax, so lottery prizes are taxed by the federal government only.
How much federal tax is withheld in Texas?
24% for prizes over $5,000. A jackpot winner usually owes more when filing because the top federal rate is 37%.
How much do I keep from a $500 million cash prize in Texas?
About $315 million if the whole prize is taxed at 37%.