Taxation: The Taxman Cometh: How Lottery Winnings are Taxed

Lottery Tax Rates Vary Greatly By State federal tax lottery winnings The CT Lottery is required by law to report and withhold federal income tax on all gambling winnings valued at more than $5,000 (Under certain federal lottery taxes All winnings over $5,000 are subject to tax withholding by lottery agencies at the rate of 24% This potentially leaves a gap between the

federal income tax on lottery winnings Like all other taxable income, the IRS requires you to report prizes and winnings on your tax return, too That means you might have to pay