NEW JERSEY LOTTERY TAX · TAX YEAR 2026
New Jersey lottery tax calculator
New Jersey taxes a New Jersey Lottery prize only when it is over $10,000, and winnings from other states' lotteries at any amount, at rates from 1.4% to 10.75%. On a $1,000,000 prize with $75,000 of wages, a single filer owes $79,933 of New Jersey tax and $340,080 of federal income tax, $420,013 in all, and keeps $579,987.
Tax on your prize
- Total tax on the prize
- $420,013.00
- Federal income tax
- $340,080.25
- New Jersey tax
- $79,932.75
- After-tax prize
- $579,987.00
- Effective rate
- 42.00%
- Federal withholding at 24%
- $240,000.00
- New Jersey withholding at 8% (2026)
- $80,000.00
- Still owed at tax time
- $100,013.00
New Jersey tax by size of prize
What a single filer with $75,000 of wages owes on a prize, and what New Jersey withholds from it.
| Prize | Federal tax | State tax | State withholding |
|---|---|---|---|
| $10,000 | $2,200 | $0 | $0 |
| $100,000 | $23,064 | $6,362 | $5,000 |
| $500,001 | $156,715 | $33,766 | $40,000 |
| $1 million | $340,080 | $79,933 | $80,000 |
| $10 million | $3,670,080 | $1,047,433 | $800,000 |
New Jersey lottery tax questions
Does New Jersey tax lottery winnings?
Yes. New Jersey taxes a New Jersey Lottery prize only when it is over $10,000, and winnings from other states' lotteries at any amount, at rates from 1.4% to 10.75%.
How much tax is due on a $1,000,000 lottery prize in New Jersey?
A single filer with $75,000 of wages owes $340,080 of federal income tax and $79,933 of New Jersey tax on a $1,000,000 prize, $420,013 in all, and keeps $579,987. On a $100,000 prize, New Jersey tax is $6,362 and federal tax $23,064.
How much is withheld from a New Jersey lottery prize?
New Jersey withholds 5% of a New Jersey Lottery prize over $10,000 and up to $500,000, and 8% of a larger one. On a $1,000,000 prize, $320,000 is withheld against $420,013 of tax, leaving $100,013 to pay at tax time.
Does New Jersey tax lottery prizes of $10,000 or less?
Not from the New Jersey Lottery. New Jersey tests the $10,000 limit on each prize, not on a year's total. A prize from another state's lottery is taxed at any amount: on a $10,000 prize, a single filer with $75,000 of wages owes $629 of New Jersey tax.
What the calculator leaves out
- New Jersey tests the $10,000 limit on each prize, not on a year's total.
- New Jersey lets gambling losses offset lottery and gambling winnings of the same year on its return, but not below zero.
Federal tax stacks the prize on wages after the 2026 standard deduction and taxes it at the ordinary brackets. Withholding treats the whole prize as winnings, though the IRS tests winnings minus the wager. The calculator takes the cash received this year: a lump sum is taxed in full the year it is paid, and annuity payments are taxed each year as they are received. Gambling losses are left out; only filers who itemize can deduct them, and from 2026 only up to 90% of losses. Tax another state may charge on a ticket bought there is left out.
Sources
- IRS Topic 419, Gambling income and losses
- IRS Instructions for Forms W-2G and 5754
- IRS Publication 505 (2026), Tax Withholding and Estimated Tax
- IRS Revenue Procedure 2025-32: 2026 tax brackets
- New Jersey Division of Taxation: lottery and gambling winnings
- NJ-1040 instructions (latest published): rate tables, exemptions, filing thresholds and retirement income