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(Note that the IRS will take 24 percent off the top and the rest will become due at tax time, though with deductions and other things you may not have to pay the whole difference.The Forbes Advisor editorial team is independent and objective. Still, this is lower than the previous rate of 39.8 percent, thanks to the tax law changes of 2017. (Depending on your annual earnings and your deductions, you may get some of this back after filing your income taxes.) Win $500,000 or more for a single person or $600,000 for a couple and the tax rate jumps to, gulp, 37 percent. While you don't have to report lottery winnings of $600 or less, if you win more than $5,000, the government will hit you with a 24 percent federal withholding tax. But, if on the off chance you do win millions in a lottery jackpot, keep in mind that the Internal Revenue Service will be looking for its fair share. Al Seib/Los Angeles Times via Getty ImagesĪh yes, winning the lottery. The Powerball jackpot in 2021 has reached over $550 million. Richard Litton of Playa Del Rey, California, holds $3,000 to purchase 1,500 Powerball tickets in 2019.

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