Prize withholdings are calculated on the total amount of gross proceeds (the amount of winnings minus the amount wagered).įor 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). The tax withholding rate is 24% for lottery winnings, less the wager, for prizes greater than $5,000.Īn example of the calculation used to determine whether a prize winning exceeds the threshold for required withholding is detailed below: The winnings are subject to federal income tax withholding (winnings greater than $5,000.00).$600 or more in winnings when the payout is at least 300 times the amount of the per board wager,. ![]() ![]() ![]() citizens, the Federal Government requires the Texas Lottery Commission to report the following lottery winnings to the IRS:
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