42.6 F
New York
Friday, March 29, 2024

New York: The most expensive state to win the lottery in

Related Articles

-Advertisement-

Must read

When the Powerball Jackpot had climbed to over $570 million earlier this month, and people all over America were lining up for their chance to win, many  local state tax departments were lining up hoping to collect as well, especially in New York.

20-year-old Shane Missler of Tampa, who just won the $451 million Mega Millions jackpot and that still unknown $570 million Power Ball Winner in New Hampshire, will be owing a sizable amount to the IRS, however both winners live in states with no income tax and will not have to pay state taxes on their lottery jackpots.

New York State is a different story completely.

New York State has the highest lottery prize tax-withholding rates in the nation, according to a report by independent tax policy research group, The Tax Foundation. In addition to the highest rate in the country on a state level, city residents pay an additional 3.8% after the state takes out almost 9%.

Most states tax lottery winnings as ordinary income.  In fact, in most states (and federally), taxes on lottery winnings over $5,000 are withheld automatically, however withholding rates do vary.

Florida, Texas, New Hampshire, Washington, Tennessee, South Dakota and Wyoming are states with no state income tax; therefore they do not tax lottery winnings.

California and Delaware do not tax state lottery winnings, provided the winner lives in the state and bought their ticket there as well. California has very high rate of taxation on every form of income except lottery earnings.

Even states that do not collect taxes on lottery winnings or even produce a winner still end up benefiting vastly; especially with a game like Powerball where only half of all ticket revenue is returned in the form of a prize. The rest of ticket sales are divided between the 43 states and DC who participate.

The Federal Government taxes large jackpots at 39.6%, the current highest income tax bracket.

balance of natureDonate

1 COMMENT

Latest article

- Advertisement -