Texas has no state income tax, so every Texas Lottery prize is taxed only by the IRS. Here's exactly what withholding to expect, how the federal 24% / 37% stack works, and how Texas compares to the highest-tax lottery states.
Texas is one of nine US states with no personal income tax at all. Because there is no state income tax, there is nothing for the Texas Lottery Commission to withhold and nothing to report on a state return. The exemption covers every Texas Lottery game:
Texas's zero state tax only covers state liability. The IRS treats lottery winnings as ordinary income everywhere in the US:
If you live in another state and buy a winning Texas ticket, you owe no Texas tax — Texas simply has no income tax. You also don't file a Texas non-resident return.
Your home state, however, will tax the winnings on your resident return if it has an income tax. Because Texas collected zero, there's no credit available to offset your home-state liability.
If you live in Texas but bought a winning ticket while traveling — say in Louisiana, Oklahoma, or New Mexico — that state's withholding applies at the source. You have no Texas resident return to file, so the only taxes on that prize are federal plus the ticket-sale state's non-resident tax.
| State | State withholding | Top state rate on lottery | Local tax? |
|---|---|---|---|
| Texas | 0% | 0% | None |
| New York | 10.9% | 10.9% | NYC: +3.876% |
| New Jersey | 5% / 8% tiered | 10.75% | None |
| California | 0% | 0% | None |
| Florida / Washington | 0% | 0% | None |
Texas sits with Florida, Washington, South Dakota, Tennessee, Wyoming, New Hampshire, and (via a specific carve-out) California on the short list of US states that take $0 in state tax from lottery winners.
Under a 2017 law, Texas Lottery winners of prizes of $1 million or more may remain anonymous if they request confidentiality when claiming. The Lottery will still disclose the winning city and the retailer that sold the ticket, but not the winner's name or address. Winners of smaller prizes are still subject to public disclosure.
Plug in your prize amount and select Texas to see your federal-only breakdown, with state tax automatically zeroed.
Open the lottery tax calculatorNo. Texas has no state income tax, so Texas Lottery prizes — Lotto Texas, Powerball, Mega Millions, Cash Five, Pick 3, and Scratch tickets — are not subject to any state withholding or state income tax. Federal tax still applies.
No. The Texas Lottery Commission does not withhold any state income tax at any prize level. Only federal withholding (24%) is taken on prizes over $5,000 before your check is issued.
The IRS withholds a flat 24% on any single lottery prize over $5,000. Lottery winnings are taxed as ordinary federal income, so a multimillion-dollar jackpot puts you in the top 37% federal bracket — meaning roughly 13% more federal tax owed at filing beyond the 24% already withheld.
The state where the winning ticket was sold applies its own withholding and tax rules. Texas has no income tax, so there's no Texas resident return to file the winnings on — your only tax liability is federal plus whatever the ticket-sale state imposes on non-residents.
No. Texas imposes no state income tax on anyone, resident or not. A New York or California resident who buys a winning Lotto Texas ticket owes zero to Texas — but their home state will tax the winnings on their resident return.
Because Texas adds zero state tax either way, the choice is a pure federal-bracket and time-value question. An annuity spreads income across 30 years so more of each payment sits below the top 37% federal bracket. A lump sum pays out ~60% of the advertised jackpot in one year, all taxed at the top rate.
Texas allows winners of prizes of $1 million or more to remain anonymous under a 2017 law (HB 59), provided you request confidentiality when claiming. The Lottery still publishes the city and the retailer that sold the ticket.
This guide is general information, not tax advice. Texas law and federal brackets can change — confirm with the Texas Lottery Commission, the IRS, or a licensed tax professional before filing.