North Dakota State Tax on Lottery Winnings
Free North Dakota lottery tax calculator for Powerball and Mega Millions. North Dakota taxes lottery winnings at 2.50% (top marginal rate).
Current Powerball $516M jackpot, single filer
$128.67M
Actual take-home: 24.9% of what they advertise
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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 North Dakota
North Dakota taxes lottery winnings at a top rate of just 2.5%, one of the lowest anywhere, so a jackpot winner here keeps more of the state share than almost anywhere else. Privacy is strong too. North Dakota Lottery winners choose whether to make their information public, and a winner who declines is not named, at any prize size. You have 180 days to claim, but only 60 days after claiming to choose the cash option instead of the annuity. The Lottery is run by the Attorney General's office, and its proceeds go mostly to the state General Fund.
- State tax rate (2026)
- 2.5% top rate
- Deadline to claim
- 180 days from the draw date
- Deadline to choose cash or annuity
- 60 days after you claim the jackpot, or it defaults to the annuity
- Anonymity
- Allowed. Winners choose whether to release their information; a winner who declines is not identified publicly, at any prize amount
- Where jackpots are claimed
- At the North Dakota Lottery office, 1720 Burlington Drive, Suite C, Bismarck, a division of the Office of Attorney General
- What proceeds fund
- The state General Fund (about 22% of each ticket dollar), plus the Multi-Jurisdictional Drug Task Force Grant Fund (2%) and the Compulsive Gambling Prevention and Treatment Fund (1%)
Sources: Tax Foundation: North Dakota (2026 top rate 2.5%) · North Dakota Lottery: Claim Your Prize · North Dakota Lottery: FAQs · North Dakota Lottery: Winners
North Dakota Lottery Winnings Tax Overview
The North Dakota state tax on lottery winnings is 2.5%, well below the national median for states that collect a lottery tax. This puts North Dakota at number 41 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 North Dakota lottery tax calculator above shows the exact lump sum take home for any current jackpot.
How the North Dakota Lottery Payout Calculator Works
In North Dakota, 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, North Dakota 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 North Dakota lottery tax rate.
How North Dakota Compares to Other Lottery Tax States
North Dakota's 2.5% lottery tax rate ranks number 41 out of 41 taxed states. States with a higher lottery tax rate than North Dakota include Ohio and Arizona. 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 North Dakota.
North Dakota Lottery Tax FAQs
What is the North Dakota state tax on lottery winnings?
North Dakota 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 North Dakota?
Most Powerball and Mega Millions winners choose the lump sum cash option. In North Dakota, 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 North Dakota 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. North Dakota 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 North Dakota?
Yes. The North Dakota Lottery lets a winner decide whether to make their name and hometown public. A winner who chooses not to release that information is not identified, and there is no prize threshold, so a Powerball or Mega Millions jackpot winner can stay private.