Key Takeaways
- You won’t pay any state income tax on winnings in Florida
- The Florida Lottery reports prizes of $600 and up to the IRS for federal taxes
- Consider talking to a financial advisor or tax pro before claiming your prize
How Much Tax Do You Pay on Florida Lottery Winnings?
Good News: One of the advantages of playing the lottery in Florida is that Florida doesn’t have a state income tax. Therefore, you don’t owe any state income tax on your lottery winnings. Let that one sink in, “You don’t owe any state income tax on your lottery winnings!”
However, you don’t get off completely scot free; you still must contend with federal taxes. For federal income tax purposes, lottery winnings are treated as ordinary income and are reported on your federal tax return.
More Good News: For anyone winning under $600, the IRS does NOT require the Florida Lottery to report or withhold federal taxes on your winnings. It is up to you to report your winnings at tax time and pay any required taxes then.
On the flip side, if it’s your lucky day and you win $600 or more, Uncle Sam will want to take a victory lap with you, as the Internal Revenue Service requires the Florida Lottery to report all winnings for $600 and above. For federal income tax purposes, lottery winnings are treated as ordinary income and are reported on your federal tax return. The federal tax rate on lottery winnings can vary depending on your total taxable income.
Prizes greater than $5000: For winners that are Citizens or Resident Aliens of the U.S. with a Social Security number, the IRS requires that the Florida Lottery withhold 24% federal withholding tax from prizes greater than $5,000. This way the government gets their cut before a winner accidentally spends all the winnings and is unable to pay taxes on the winnings at tax time. (The Florida Lottery is not required to withhold federal withholding taxes from prizes for $5,000 or less.)
U.S. citizens or resident aliens without a Social Security number, the Florida Lottery is required to withhold 24% backup federal withholding tax from any prize of more than $600.
Non-resident aliens, the Florida Lottery is required to withhold 30% federal withholding tax from all prize amounts.
FOR MORE INFO Search tax on this page https://flalottery.com/faq
Florida Lottery Tax Calculator: Estimate your winnings:
(Assuming a 24% Federal Tax Rate)
Here’s how it shakes out. If you Win $1000 you owe $240, but since the Florida Lottery won’t withhold any federal taxes on this amount, its up to you to report and pay applicate taxes come tax time.
Win $10,000 you owe $2,400
Win $100,000 you owe $24,000
And if you’re lucky enough to win a cool $Mil, you’ll owe $240,000
Avoiding Tax Traps: Tips for Florida Lottery Winners
The more you owe the more you’ve won! So, no matter how you slice it, having to calculate how much you owe in taxes is a good problem to have but you want to be smart about it.
Be sure to talk to a financial advisor or tax expert before cashing in your ticket. Especially, for the large prizes or prizes that offer a lump sum vs annual payment option. They can help with tax planning strategies and possible double taxation scenarios.
Good luck out there!
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