How much tax do you pay on lottery winnings in Texas?

Texas takes nothing. Texas levies no personal income tax. You still owe federal tax, which reaches 37% on a jackpot.

Is it better to take the lump sum or annuity in Texas?

The state rate of 0% applies to both, so Texas's tax treatment does not favour one over the other. The decision comes down to whether you want control of the capital or the structural protection of a payment stream.

How much is withheld immediately?

The lottery withholds 24% federally at claim time and nothing for Texas state tax. That is less than you actually owe. The top federal bracket is 37%, and the difference is due when you file.

Can I choose cash or annuity after I win the Powerball in Texas?

No. The Texas Lottery says the choice must be made when the ticket is purchased, by marking either 30 annual payments or the cash value option on the play slip, and it cannot be changed later. Winners in several other states, including California, Washington and Pennsylvania, get 60 days after claiming.

Can I stay anonymous if I win a Texas jackpot?

Yes, if the prize is $1 million or more. You must elect anonymity on the date you claim. If an entity claims, its name and its authorized representative's name can be released unless that person is a beneficial owner who elects anonymity. You still have to show government-issued ID to the lottery and claim in person in Austin.

Texas lottery tax calculator

Q: Can lottery winners stay anonymous in Texas?

Yes, above a prize threshold. Texas levies no income tax, and winners of $1 million or more may keep their identity confidential.

Texas takes nothing from your lottery winnings. You pay federal tax only.

State rate

Among the best states to win in

Anonymity

Yes, above a prize threshold

Local tax

None

Texas levies no income tax, and winners of $1 million or more may keep their identity confidential.

Now spend it: $205.4 million from TexasWhat the current Powerball leaves you here, carried straight into the planner. Buy the house, then see what the rest pays you every year.

Texas has no personal income tax, so a Texas jackpot is taxed only by the federal government. The Lottery withholds 24% from prizes over $5,000 for U.S. citizens and residents, and 30% from nonresident aliens on prizes of $600 or more. That is the full withholding picture at claim, with no state or local layer, and whatever else is owed is a federal filing question. For a Texas resident, that is the main reason a Texas jackpot looks better on paper than the same prize in Maryland, where 9.5% more is withheld for state and local tax.

Texas is unusual on the payout choice. The cash or annuity decision is made when the ticket is bought, by marking the play slip, and the Texas Lottery says it cannot be changed later. It describes the rule as a response to IRS tax rulings. California, Washington and Pennsylvania instead give winners 60 days after claiming, so a Texas player cannot wait to see the jackpot size before choosing. Decide before you buy.

Claiming is centralized in Austin. The lottery has been run by the Texas Department of Licensing and Regulation since the Texas Lottery Commission was abolished on September 1, 2025. Winners should also know that delinquent child support is deducted from the prize if the lottery holds a certified court order, a writ of withholding or a child support lien notice. Privacy is the upside: $1 million winners can stay anonymous.

Lump sum vs annuity in Texas

Powerball is currently advertising $760 million, with a cash value of $326 million. Here is what a single filer in Texas would keep under each payout option.

Lump sum

One payment of $326 million, today

$205,430,000

Federal tax: $120,570,000
Texas tax: $0
Effective rate: 36.98%

30-year annuity

$760 million paid across 29 years

$480,299,992

First payment, after tax: $7,256,627
Final payment, after tax: $29,713,454
Total advantage: +$274,869,993

The annuity pays $274,869,993 more in total, but the lump sum can be invested immediately and stays under your control. Around nine in ten winners take the cash. See how to decide between them.

Claiming a jackpot in Texas

Deadline: Draw game prizes, including Powerball and Mega Millions jackpots, must be claimed within 180 days after the draw date.
Where to claim: All Powerball, Mega Millions and Lotto Texas jackpots, and any prize over $5 million, are processed at Texas Lottery headquarters in Austin by appointment; call 512-344-5252 to start an inquiry and schedule. Jackpot winners should plan on an in-person visit with government-issued ID.
Staying anonymous: A winner of $1 million or more, or a beneficial owner of a legal entity that wins that much, can choose to stay anonymous, but only by electing it at the time of claiming. If a legal entity claims, its name and its authorized representative's name can be released unless that representative is a beneficial owner who elects anonymity.
Living in another state: Texas has no personal income tax, so it takes no state tax from a prize won on a ticket bought here, and a nonresident's state tax depends on where they live. Tickets must be bought from a licensed retailer in Texas. A Texas resident who buys elsewhere follows that state's rules: Maryland, for example, withholds 8.75% from nonresident winners on prizes over $5,000. Residents of California and Pennsylvania are still taxed by their home states on a Texas prize, because California taxes out-of-state lottery winnings and Pennsylvania taxes residents on lottery winnings from every source.

Run your own numbers

Switch games, compare the annuity, change your filing status, then plan what to do with what is left.

1. Choose a jackpot

Powerball

$760 million

Cash value $326 million

Next draw Saturday, October 31

Mega Millions

$463 million

Cash value $194.9 million

Next draw Friday, October 30

2. Where did you buy the ticket?

Filing status

Payout

3. What you actually take home

Your estimated take-home

$205,430,000

36.98% of the prize goes to tax

You keep$205,430,00063.02%

Federal tax$120,570,00036.98%

Cash value (lump sum)	$326,000,000
Federal tax withheld24% taken automatically at claim time	−$78,240,000
Additional federal tax due at filingThe gap between 24% withholding and your real bracket	−$42,330,000
Texas state taxNo state income tax	−$0
Total tax	−$120,570,000
You keep	$205,430,000

The lottery withholds $78,240,000 up front, but your actual federal bill is $120,570,000. Set aside roughly $42,330,000 for April. This shortfall is the most common surprise for jackpot winners.

4. Plan what to do with it

The hard part is not the windfall, it is what is left in year ten. Sketch out your spending and see what the remainder can pay you every year, indefinitely.

What would you buy first?

Tap an idea to add it at a typical price, or dream up your own. Every amount stays editable once it is in your plan.

The fun part

The people you love

Something else

Amount (USD)

Your plan

Nothing yet. Start spending and watch what is left keep paying you.

After-tax winnings: $205,430,000
Planned spending: −$0
Left to invest: $205,430,000

Paid to you every year, for life

$8,217,200

That is $684,767 a month, or about 94 times the typical American household's income, without touching the principal.

Assumes the remaining $205,430,000 is invested and you draw 4.0% a year, the standard planning rule for money meant to last indefinitely.

Share your plan

Anyone with the link sees your breakdown and can build their own.

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Texas lottery tax questions

Compare with other states

See every state ranked

Rates reflect each state's top marginal income tax rate as applied to lottery winnings, current as of 2026-01-01. The amount withheld at claim time frequently differs. This is an estimate for planning, not tax advice.

Texas claim rules checked 2026-10-02 against: