How much tax does a lottery winner pay?

Answer

A December 2013 article on Forbes states that a New York City resident would be taxed at a rate of 48.5 percent. The total dollar value of taxes in this situation would be $257.5 million on a $500 million jackpot win.

The taxes paid on lottery winnings depends on the city and state the winner lives in. Residents of eight of the 43 states that participate in Mega Millions do not have to pay state tax on lottery winnings. Florida, New Hampshire, Tennessee, Texas, South Dakota and Washington do not have a state income tax. California and Pennsylvania residents are exempted from state tax if they bought their tickets in state. Forbes states that as of December 2013, 39.6% percent of the winnings go to the federal government.

Reference:
Explore this Topic
Individuals who play the lottery in New York will be subject to an 8.82% state tax withholding as of December 2012. In Addition to that, NYC residents will pay ...
For tax purposes, lottery winnings count as regular individual income, just like wages, with the rate is based on the taxpayer's total earnings. A lottery jackpot ...
According to the Internal Revenue Service, gambling winnings are fully taxable and must be reported to the IRS. This includes money won from the lottery and horse ...
About -  Privacy -  Careers -  Ask Blog -  Mobile -  Help -  Feedback  -  Sitemap  © 2014 Ask.com