California Lottery Tax Calculator (2026)

Written by Eric Ridley, California lottery lawyer and estate planning attorney, Ridley Law. Last reviewed September 28, 2026.

A California resident who wins on a ticket bought in California pays no California income tax on the prize (Gov. Code, § 8880.68). Federal tax is the whole bill, and the 24% the Lottery withholds is well short of what a jackpot winner owes. Enter your numbers below to see the gap for the cash option and the annuity.

This calculator needs JavaScript. The short version: the Lottery withholds 24% for federal tax, a large prize is taxed mostly at 37%, and California charges nothing on a California ticket.

What the calculator does

It takes the advertised jackpot, which is the annuity figure, and works out two things side by side.

The cash option. If you enter the cash value the Lottery announced for your drawing, it uses that. If you leave it blank, it estimates the cash value at 42% of the advertised jackpot, close to the ratio Powerball published for its September 2026 jackpots. That’s a rough placeholder. The real ratio moves with interest rates every drawing, and Powerball and Mega Millions publish the cash value for each jackpot, so use the real number when you have it.

The annuity. Powerball and Mega Millions jackpots paid as an annuity arrive in 30 graduated annual payments, each 5% larger than the last, and the 30 payments add up to the advertised amount. The calculator solves for the first payment and builds the schedule from there.

For each option it shows the 24% withheld when the prize is paid (IRS Instructions for Forms W-2G and 5754), the estimated federal tax at 2026 rates stacked on top of your other income, and what’s left.

Why “still owed at filing” matters most

This is the line that surprises people. Withholding on lottery prizes is a flat 24%. A seven-figure prize is taxed mostly in the 37% bracket. On a $42 million cash payout, that’s a difference of several million dollars due the following April, or sooner if you want to avoid an underpayment penalty.

The money is in your account, so it feels like yours. Part of it isn’t. The first thing I tell a jackpot winner is to move the estimated shortfall into a separate account the day the prize lands and leave it there until the CPA says otherwise. The full explanation is on the California lottery taxes page.

If you bought the ticket in another state

The California exemption covers prizes from the California State Lottery. A California resident who wins on a ticket bought in Nevada, Arizona or anywhere else owes California income tax on the prize, like any other gambling winnings (FTB, Gambling). Choose “Another state” and the calculator adds California tax using the 2025 California rate schedules, which the FTB itself tells taxpayers to use for 2026 estimates, plus the 1% Behavioral Health Services Tax on taxable income over $1 million (Rev. & Tax. Code, § 17043). It doesn’t model the other state’s own tax or the credit California may allow for it. That’s a CPA question.

What it leaves out

Itemized deductions, including a large charitable gift in the win year, which can change the answer a great deal. See California lottery taxes.
Future tax law. Every annuity year is taxed at 2026 brackets. Nobody knows the brackets in 2046.
Investment growth on the cash option, and inflation eating the later annuity payments. Comparing the two properly is the subject of lump sum vs. annuity in California.
Estate tax if you die before the annuity finishes. See what happens to a lottery annuity when the winner dies.

It’s a starting point for the conversation with your CPA, not a substitute for it.

Questions I get asked

How much tax do you pay on a $1 million lottery prize in California?

On a California ticket, no California tax. Federally, the Lottery withholds $240,000, and a single filer with ordinary other income will owe roughly $330,000 to $350,000 in total federal tax at 2026 rates, so expect to pay about another $100,000 when you file. Run your own figures above.

Does California tax Powerball winnings?

Not if the ticket was bought in California. Powerball and Mega Millions tickets sold here are California State Lottery games, and their prizes are exempt under Gov. Code § 8880.68. A Californian who wins on a Powerball ticket bought in another state pays California tax on it.

Is the lump sum or the annuity taxed less?

The annuity usually produces less total federal tax only when each year’s payment sits in lower brackets, which for big jackpots it mostly doesn’t, since payments over about $640,000 for a single filer are taxed at 37% anyway. The bigger differences between the options are control, investment return, and estate planning.

Why is the cash value so much less than the jackpot?

The advertised jackpot is the total of 30 annual payments. The cash value is roughly what it would cost today to fund those payments. When interest rates rise, the cash value as a percentage of the jackpot falls.

Does the calculator work for a group or pool win?

Yes. Enter your percentage share and it scales the prize. Each member of a properly documented group is taxed on their own share. How that paperwork works is on the lottery pool agreement page.

Read this before you act on anything above

This is general information and an illustrative estimate, not tax or legal advice. Using the calculator doesn’t make you my client, and I don’t know your facts.

I’m not a CPA. Tax preparation isn’t my practice. Before you choose between the cash option and the annuity, have a CPA or enrolled agent run your actual return.

Figures are for 2026 and they change. Federal brackets are from Rev. Proc. 2025-32. California brackets are the 2025 schedules pending the FTB’s 2026 release.

Ridley Law, Eric Ridley, California Bar No. 273702. Practice limited to estate planning, trust administration, and uncontested probate, serving Ventura, Santa Barbara, and Los Angeles counties. This is attorney advertising.

California Lottery Tax Calculator: Cash Option vs. Annuity, After Tax