What this calculator does
Find out how much of a lottery jackpot you'd really keep after taxes. Enter the advertised jackpot, the cash value, your filing status and your state's tax rate. You'll see the take-home amount for the lump sum and for the yearly payments, and how far apart they are.
Big US jackpots usually come with a choice. The advertised amount is the total of a series of yearly payments, called an annuity. The cash value is a smaller amount paid all at once. Taxes take a large bite from both. Real payouts and rules vary by game and by state, so treat the result as an estimate.
Where it's used
Why this math matters outside the classroom:
- Lump sum or annuity. A winner compares keeping about $21.98 million now with about $48.12 million spread over 30 years.
- Planning for tax day. A winner sets aside the gap between 24% withholding and the 37% top rate before filing.
- Geometric series practice. Students find the first of 30 payments growing 5% a year that add up to $80 million, which is $1,204,114.81.
- Comparing states. Someone checks how a 0% state rate changes the take-home compared with a 4.5% rate on the same prize.
- Office pool planning. Coworkers in a pool estimate the after-tax total before working out each person's share.
Grade level and standards: Grades 11–12; Common Core State Standards for Mathematics HSA.SSE.B.4. © Copyright 2010. National Governors Association Center for Best Practices and Council of Chief State School Officers. All rights reserved.
How to use it
- Enter the advertised jackpot and the cash value. Games usually publish both figures side by side.
- Keep 30 payments growing 5% a year, or enter the payment plan your game uses.
- Choose your filing status, your state's tax rate on the prize, and whether to subtract the full federal tax or only the amount withheld.
- Pick the payout you're thinking about, then compare the two take-home amounts and the payment table.
What the inputs mean
- Advertised jackpot (annuity total)
- The headline jackpot. It's the total of all the yearly payments, before tax. This figure comes from the game.
- Cash value (lump-sum option)
- The lump sum offered instead of the yearly payments. It's smaller because it's paid now. This figure also comes from the game, and it changes from draw to draw.
- Number of annuity payments
- How many yearly payments there are. Thirty is a common US setup. Check your game's rules.
- Yearly increase in each payment
- How much bigger each payment is than the one before. A 5% yearly increase is common in large US games, so it's the default. Use 0 for equal payments.
- Federal tax to subtract
- Withholding is only what's taken out when you're paid. The full tax is what the 2026 federal brackets say you owe, which is usually much more on a big prize. The difference is due when you file your return.
- Federal withholding rate
- The default of 24% is the federal rate generally withheld from large lottery prizes. Change it if your payer uses a different rate.
- State income tax rate on the prize
- Your state's income tax rate on the prize. You enter it yourself; the calculator has no state table. Some states don't tax lottery prizes, and some cities add their own tax.
Formula and method
first payment = J × g ÷ ((1 + g)^n − 1) (or J ÷ n when g = 0) payment in year k = first payment × (1 + g)^(k − 1) federal tax = 2026 bracket tax on each year's prize, or prize × withholding rate state tax = prize × state rate take-home = prize − federal tax − state tax difference = yearly payments' take-home (all years) − lump-sum take-home
In the first two lines, J is the advertised jackpot, g is the yearly increase as a decimal and n is the number of payments. The payments grow by the same percent each year and add up to exactly J. The first line comes from the standard formula for adding up such a series.
Federal tax uses the 2026 brackets the IRS published for your filing status. Each slice of the prize is taxed at its own rate, so a jackpot reaches the top rate of 37% almost at once. Each yearly payment is taxed in the year you get it.
The full tax treats the prize as your only income, with no deductions. The state tax is your rate times the prize. Nothing is adjusted for the time value of money, so a dollar in year 30 counts the same as a dollar today.
Worked example
A jackpot is advertised at $80,000,000, with a cash value of $37,500,000. You file as single, your state taxes the prize at 4.5%, and the annuity is 30 payments growing 5% a year.
- Lump sum, federal tax by the 2026 single brackets: $13,830,957.25.
- Lump sum, state tax: $37,500,000 × 4.5% = $1,687,500.
- Lump sum kept: $37,500,000 − $13,830,957.25 − $1,687,500 = $21,981,542.75.
- Yearly payments, first one: $80,000,000 × 0.05 ÷ (1.05^30 − 1) ≈ $1,204,114.81, growing to about $4,956,299.82 in year 30.
- Taxes on the yearly payments over 30 years: $28,278,717.50 federal and $3,600,000 state, so you keep $48,121,282.50.
Result: The lump sum leaves about $21,981,542.75 and the yearly payments about $48,121,282.50 spread over 30 years. That's $26,139,739.75 more in total from the yearly payments. Only $9,000,000 of the lump sum's federal tax is withheld at 24%, so about $4,830,957.25 more is due at filing.
Understanding the result
The yearly payments almost always total more, because the advertised jackpot is bigger than the cash value. But that money arrives over decades. The lump sum could be invested and grow in the meantime, and the present value calculator can help you compare.
Don't plan with the withheld amount alone. On a large prize, 24% withholding falls well short of the top federal rate, and the rest comes due at tax time.
The top bracket line shows the rate on the last dollar of the lump sum. For any large jackpot, it's 37%.
Assumptions and limitations
- The prize is your only taxable income for the year, with no deductions or credits.
- The 2026 federal brackets apply to every payment year. Real brackets usually rise with inflation, so later years may be taxed a little less.
- The state rate is a flat rate on the whole prize. Local taxes aren't included unless you add them to that rate.
- Payments arrive once a year, and they add up to exactly the advertised jackpot.
- Results aren't rounded inside the calculation.
- Real payouts and rules vary by game and state. Your game's official rules and the payer's statement are what count.
- Tax law can change over 30 years of payments, and this calculator can't predict that.
- It doesn't handle sharing a prize, gifts to family, trusts, or taxes in another country.
- This is an estimate, not tax advice. Anyone who wins a large prize should talk to a tax professional.
Frequently asked questions
Why is the cash value so much smaller than the jackpot?
The advertised jackpot is the total of all the yearly payments. The cash value is roughly what it would cost today to fund those payments. So it's much smaller. The gap depends on interest rates, and it changes from draw to draw.
Is 24% all the federal tax I'd pay?
Usually not. 24% is what's generally withheld up front. A large prize puts most of the money in the 37% bracket, so you'd owe more when you file. In the example, that's about $4,830,957.25 more.
Do yearly payments save tax?
A little, sometimes. Each payment is taxed separately, so a few more dollars fall in the lower brackets over the years. On a big jackpot, though, almost every payment still reaches the 37% bracket.
Where do the numbers come from?
The jackpot, the cash value and the payment plan come from the game, and you enter them. The 24% default is the usual federal withholding rate. The brackets are the IRS figures for 2026. The state rate is yours to enter.
What are my chances of winning in the first place?
Very small. The lottery odds calculator shows the exact odds for a pick-style game. It also shows the average value of a ticket, which you can compare with its price.
How this calculator is checked
Method: Geometric series for annuity payments that grow by a fixed percent and add up to the jackpot. Federal tax from the 2026 ordinary brackets (Rev. Proc. 2025-32) in src/lib/finance/tax-2026.ts, or a flat withholding rate input. State tax is a flat rate input. The calculation is covered by automated tests with known reference values and edge cases. Last updated 2026-10-26. Found a problem? Tell us.
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