Texas(TX) Lottery Winnings Tax Information

Texas Lottery Tax Information

U.S. Citizens/Residents

For U.S. citizens, the Federal Government requires the following winnings be reported to the IRS for tax purposes:

  • $600 or more and if the winnings are at least 300 times the amount of the per board wager,
  • For prizes over $5,000, the winnings are subject to federal income tax withholding.
The tax withholding rate is 25% for winnings, less the wager, that are greater than $5,000.

An example of the calculation used to determine whether a prize winning exceeds the threshold for required withholding is detailed below:

Prize withholdings are calculated on the total amount of gross proceeds (the amount of winnings minus the amount wagered). For example, if you purchase a $50.00 ticket that has a prize of $5,007.00, taxes would not be automatically withheld because the gross proceeds are less than $5,000, ($5,007.00 - $50.00 = $4,957.00). However, for a $50.00 ticket with a prize of $5,100.00, taxes will be automatically withheld because the gross proceeds exceed $5,000, ($5,100.00 - $50.00 = $5,050.00).

Non U.S. Citizens/Residents

For non U.S. citizens, winnings of $600 or more are reported to the IRS for tax purposes.

The tax withholding rate is 30% for winnings of $600 or more.

Withholding amounts do not necessarily reflect a person.s actual tax liability related to their income. Based on the individual.s unique tax situation, they may owe additional monies at the end of the tax year or they may be eligible for a refund of some of the monies withheld. Prize winners should consult a tax professional to determine their individual tax liability on income.

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