Arizona State Tax on Lottery Winnings
Free Arizona lottery tax calculator for Powerball and Mega Millions. Arizona taxes lottery winnings at 2.50% (top marginal rate).
Current Powerball $232M jackpot, single filer
$60.54M
Actual take-home: 26.1% of what they advertise
What You'd Actually Take Home.
Lottery Tax Calculator for Powerball, Mega Millions, and Every State.
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Standard deduction: $16,100. All lottery income is taxed at your individual rate. This is the most common filing status for winners.
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What to Know Before Claiming a Jackpot in Arizona
Arizona is one of the best states in the country for a jackpot winner who values privacy. On top of a low 2.5% flat income tax, Arizona law lets a winner of $100,000 or more elect to keep their name permanently confidential, and every large prize is automatically shielded for the first 90 days. Only the city and county of residence stay public. The practical takeaway is to make the permanent-confidentiality election on the winner claim form. Without that request, the winner's name may become public after the automatic 90-day period.
- State tax rate (2026)
- 2.5% flat state income tax
- Deadline to claim
- 180 days from the draw date
- Anonymity
- Winners of $100,000 or more may request permanent name confidentiality. Without a request, the name stays confidential for 90 days. City and county stay public
- What unclaimed prizes fund
- Future prizes, court-appointed child advocates, Tribal College Dual Enrollment, child-exploitation investigations, and victims' rights
Sources: Arizona Dept. of Revenue: Tax Highlights · Arizona Lottery: FAQ · Arizona Lottery: 2026 Winner Brochure · A.R.S. Section 5-573
Arizona Lottery Winnings Tax Overview
The Arizona state tax on lottery winnings is 2.5%, well below the national median for states that collect a lottery tax. This puts Arizona at number 40 out of 41 taxed states, which means a larger share of your Powerball or Mega Millions prize stays in your pocket once the federal lottery tax of up to 37% is settled. The Arizona lottery tax calculator above shows the exact lump sum take home for any current jackpot.
How the Arizona Lottery Payout Calculator Works
In Arizona, the lottery payout calculation begins with the lump sum cash option, which equals roughly 45% of the advertised jackpot. The IRS withholds 24% federal lottery tax at the moment of payout, but a Powerball or Mega Millions prize pushes the winner into the 37% top federal bracket, so additional federal tax comes due at filing. On top of that, Arizona taxes lottery winnings at 2.5% of the full lump sum. The lottery payout calculator above runs all of this math for you, using IRS 2026 brackets and the top marginal Arizona lottery tax rate.
How Arizona Compares to Other Lottery Tax States
Arizona's 2.5% lottery tax rate ranks number 40 out of 41 taxed states. States with a higher lottery tax rate than Arizona include Indiana and Ohio. States with a lower rate include North Dakota. For context, 10 states collect no lottery tax at all, which means a Powerball or Mega Millions winner in one of those states keeps an extra 2.5% of their lump sum compared to a winner in Arizona.
Arizona Lottery Tax FAQs
What is the Arizona state tax on lottery winnings?
Arizona taxes lottery winnings at a top marginal rate of 2.5%. This rate applies to the lump sum cash option from any Powerball or Mega Millions prize, and it is paid in addition to the federal lottery tax of up to 37% at the highest bracket. The lottery tax calculator above shows the exact dollar amount for any current jackpot.
Should I take the lump sum or annuity in Arizona?
Most Powerball and Mega Millions winners choose the lump sum cash option. In Arizona, both options face the same 2.5% state lottery tax rate, but the annuity spreads the tax across 30 years while the lump sum delivers the full cash value now. The lottery payout calculator above shows the lump sum after taxes; the annuity choice is a separate financial decision based on personal goals and investment return assumptions.
Does Arizona withhold tax on a lottery payout before payment?
The IRS withholds 24% federal lottery tax on any lottery prize above $5,000 before the winner ever sees the check. Arizona also withholds state tax at or near the 2.5% top rate at the moment of payout. The remaining federal balance, up to the 37% top bracket, then comes due in April when the winner files a federal return.
Can you stay anonymous if you win the lottery in Arizona?
Yes. Under Arizona law, the name of anyone who wins a prize of $100,000 or more is automatically kept confidential for 90 days, and the winner may elect to keep it permanently confidential. The city and county of residence remain public. Any Powerball or Mega Millions jackpot is far above the $100,000 threshold, so a jackpot winner who requests confidentiality can keep their name out of public records, although their city and county remain public.