The XXXXX State Lottery is required to report lottery winnings of $600 or more to the Internal Revenue Service.
The XXXXX State Lottery withholds taxes before prize money is paid out. Federal and state withholding taxes are deducted for every lottery prize over $5,000.
For XXXXX residents: Current federal tax law requires the Lottery to withhold 24 percent in federal income taxes, and current XXXXX state law requires the Lottery to withhold 7.25 percent in XXXXX state income taxes.
Lottery prizes up to $599. Lottery prizes of up to $599 will be paid to winners shortly after receipt of the prize money from the XXXXX State Lottery. In this case, no taxes are withheld from the prize.
Lottery prizes of $600 or more. All lottery prizes of $600 and up are collected by the winners personally at offices of the XXXXX State Lottery.
The XXXXX State Lottery withholds taxes on all lottery prizes over $5,000 as detailed above.
TheLotter XXXXX takes no commission on lottery prizes.
Tax Returns. According to the Internal Revenue Service, winnings from lotteries and raffles are considered gambling winnings. After the end of the year, the XXXXX State Lottery will send each winner a Form W2-G report showing the amount of lottery prize payments to be reported as income and the amounts of federal and state taxes withheld to be reported as credits on the winner’s federal and state tax returns.
For winners who are not U.S. citizens or legal residents, the IRS requires a 30 percent federal withholding on all applicable prize payments. Additionally, the Minnesota State Lottery is required to withhold 7.25 percent in state taxes on any prize over $5,000. While prize money is generally treated as income similar to wages, the winner’s final tax liability may vary depending on their individual tax status and residency.
