Arizona lottery tax calculator
Federal tax at your 2026 bracket (up to 37%) plus a flat 2.5%. A single filer with no other income keeps $654,999.75 of a $1,000,000 prize: $320,000.25 federal and $25,000.00 Arizona tax.
Checked 2026-11-06. Sources: Arizona Department of Revenue: Withholding highlights; Arizona Department of Revenue: Withholding tax (individual).
Federal tax at 2026 rates plus Arizona's state tax and withholding. Enter the amount you receive this year: the cash option, or one annuity payment.
21+ in most states. If gambling stops being fun, free confidential help is available 24/7: call or text 1-800-GAMBLER (National Council on Problem Gambling).
How Arizona taxes lottery prizes
- Arizona taxes individual income at a flat 2.5%.
- Since the Tax Corrections Act of 2025, Arizona prize withholding is the top state rate instead of 20% of the federal withholding.
Arizona withholds 2.5% (the top state rate) from prize winnings that are subject to federal withholding, which for lotteries means prizes over $5,000.
Take-home by prize size in Arizona
| Prize | Federal tax | AZ tax | Withheld at claim | Take-home |
|---|---|---|---|---|
| $10,000.00 | $0.00 | $250.00 | $2,650.00 | $9,750.00 |
| $100,000.00 | $13,170.00 | $2,500.00 | $26,500.00 | $84,330.00 |
| $1,000,000.00 | $320,000.25 | $25,000.00 | $265,000.00 | $654,999.75 |
| $10,000,000.00 | $3,650,000.25 | $250,000.00 | $2,650,000.00 | $6,099,999.75 |
| $100,000,000.00 | $36,950,000.25 | $2,500,000.00 | $26,500,000.00 | $60,549,999.75 |
Single filer, no other income, federal standard deduction and 2026 brackets. Local (city or county) taxes are not included.
Questions
How much tax do you pay on lottery winnings in Arizona?
Federal tax at your 2026 bracket (up to 37%) plus a flat 2.5%. A single filer with no other income keeps $654,999.75 of a $1,000,000 prize: $320,000.25 federal and $25,000.00 Arizona tax.
Does Arizona withhold state tax from lottery prizes?
Arizona withholds 2.5% (the top state rate) from prize winnings that are subject to federal withholding, which for lotteries means prizes over $5,000.
Is the 24% federal withholding the whole federal tax?
No. It is a down payment. Large prizes fall mostly into the 37% bracket, so the rest is due when you file.
Arizona sources
- Arizona Department of Revenue: Withholding highlights
- Arizona Department of Revenue: Withholding tax (individual)
Checked 2026-11-06. Other states: Pennsylvania, Michigan, California, Illinois, Texas, Virginia, Oregon, Florida, Georgia, Wisconsin, Massachusetts, Colorado.
Sources
- Rev. Proc. 2025-32, section 4.01 (2026 tax rate tables) and 4.14 (standard deduction)
- IRS proposed §1.165-10, Internal Revenue Bulletin 2026-19 (90% wagering loss limit, P.L. 119-21 §70114)
- Instructions for Forms W-2G and 5754 (Rev. January 2026)
- IRS Topic no. 419, Gambling income and losses
Checked 2026-11-06. The 90% rule is law (P.L. 119-21); the IRS regulation implementing it is still proposed. Bills to restore the 100% deduction have been introduced in Congress but not passed. This is an estimate for planning, not tax advice; a tax professional can check your full return.