Best States to Win the Lottery (2026)
State income taxes can cost lottery winners millions. Here's how every major state stacks up — with take-home estimates for a $100 million jackpot.
Updated April 2026 · Based on 2026 state tax rates
Quick Answer
The best states to win the lottery are California, Florida, Texas, New Hampshire, South Dakota, Tennessee, Washington, and Wyoming — all charge 0% state tax on lottery prizes. The worst state is New York at 10.9% state + up to 3.876% NYC local tax.
How We Compare State Lottery Taxes
Every US jackpot winner faces the same federal tax liability. The only variable between states is the state income tax rate on lottery winnings. Most states treat lottery prizes as ordinary income, applying the same rate as wages. A handful treat lottery income differently or exempt it entirely.
The estimates in this article assume a $100 million jackpot, lump-sum cash option (approximately $60 million pre-tax), with federal tax at the top marginal rate of 37%, plus state tax. City taxes (like New York City's) are noted separately.
State Lottery Tax Rates — From Best to Worst
Take-home estimate based on a $100M jackpot, lump sum, top federal rate (37%). Approximate.
| State | State Tax | Take-Home ($100M) |
|---|---|---|
| California | 0% | $37.8M |
| Florida | 0% | $37.8M |
| Texas | 0% | $37.8M |
| New Hampshire | 0% | $37.8M |
| South Dakota | 0% | $37.8M |
| Tennessee | 0% | $37.8M |
| Washington | 0% | $37.8M |
| Wyoming | 0% | $37.8M |
| Pennsylvania | 3.07% | $35.9M |
| Indiana | 3.23% | $35.8M |
| Michigan | 4.25% | $35.3M |
| Colorado | 4.40% | $35.2M |
| Arizona | 4.50% | $35.1M |
| Georgia | 5.49% | $34.5M |
| Virginia | 5.75% | $34.3M |
| Illinois | 4.95% | $34.8M |
| Massachusetts | 5.00% | $34.8M |
| Minnesota | 9.85% | $31.9M |
| Oregon | 9.90% | $31.9M |
| New Jersey | 10.75% | $31.4M |
| New York | 10.90%+NYC 3.876% | $31.3M |
Estimates are approximate. Consult a tax professional for exact figures.
The Best States: California, Florida, and Texas
California stands out not just for its 0% lottery tax, but because it is one of the highest-ticket-sales states in the country — making it a natural hub for lottery activity. Florida and Texas share the same 0% tax advantage with large populations and no state income tax at all.
For a $100 million jackpot winner in Florida vs. New York, the difference is approximately $8.5 million in after-tax take-home — just on the state/local tax difference alone.
The Worst States: New York and New Jersey
New York has the highest state lottery tax rate at 10.9%. Winners who live in New York City also face a city income tax of up to 3.876%, bringing the combined state + city tax rate to approximately 14.77% — the highest in the United States for lottery winnings. On a $60 million lump sum, that's nearly $8.9 million in state and city taxes alone.
New Jersey comes in second at 10.75%. Oregon (9.9%) and Minnesota (9.85%) round out the most expensive states for lottery winners.
Delaware: No Tax Regardless of State
Delaware is worth noting for a different reason: it does not tax lottery winnings regardless of where the winning ticket was purchased. If you win a multi-state lottery game with a ticket purchased in New York but you are a Delaware resident, Delaware does not impose its own tax — though New York may still claim its share based on where the ticket was sold.
Can You Move States to Avoid Lottery Taxes?
This is a common question and the answer is: it depends. Tax jurisdiction for lottery winnings is complex. Some states tax based on the winner's state of residence at the time of the draw; others tax based on where the ticket was purchased. Lottery prizes won in New York, for example, are subject to New York state tax regardless of where the winner lives when they claim the prize.
Any strategy involving relocation before claiming a prize should involve consultation with a tax attorney familiar with multi-state lottery taxation. The IRS always gets its share regardless of state moves.
Calculate Your State's Take-Home
Enter any prize amount and pick your state to see the exact lump sum and annuity take-home after all taxes.
Frequently Asked Questions
Which state is the best to win the lottery?
For keeping the most money, the best states to win the lottery are California, Florida, Texas, New Hampshire, South Dakota, Tennessee, Washington, and Wyoming — all of which charge 0% state income tax on lottery winnings. Of these, California and Florida stand out for their large populations (meaning more lottery services) and favorable tax treatment combined.
Which states tax lottery winnings the most?
New York has the highest state lottery tax at 10.9%, followed by New Jersey at 10.75%, Oregon at 9.9%, and Minnesota at 9.85%. New York City also adds a local tax of up to 3.876%, making New York City the highest combined state+local lottery tax jurisdiction in the US — potentially over 14% combined at the state/local level.
Can you move to a no-tax state before claiming your lottery prize?
Theoretically yes, but lottery taxation is complex. Most states tax based on where the winning ticket was purchased, not where you live at the time of claiming. If you buy a Powerball ticket in New York and win, New York typically claims tax on that prize regardless of where you move afterward. Consult a tax attorney before taking action.
Do you still owe federal taxes if your state has no lottery tax?
Yes. Federal income tax applies to all lottery prizes regardless of your state's tax policy. The federal withholding rate is 24% for prizes over $5,000. The top marginal federal rate for large jackpots is 37%. States with no lottery tax only eliminate the state-level component — you still owe the IRS.
How much do you keep from a $100 million lottery win in New York vs Florida?
Choosing the lump sum, a $100M jackpot pays approximately $60M cash. After federal tax (37%), you keep about $37.8M. In Florida (0% state tax), that's your take-home. In New York, subtract another 10.9% state + up to 3.876% NYC tax: roughly $29.3M take-home in NYC vs $37.8M in Florida — an $8.5M difference.