Winning the lottery can make your dreams come true overnight and jackpot prizes often reach astronomical proportions. Before you receive your prize money, however, government tax collectors may claim their share of the prize. In some lotteries (such as the US Powerball and Mega Millions), the advertised jackpots are the prize amounts before the deduction of taxes, while in other lotteries, no taxes are deducted at all. Moreover, taxes on lottery winnings are imposed by many non-US states and countries; you may want to check the specific tax laws for the country issuing the lottery and your country of residence for every draw you enter. Ultimately, always consult with a tax professional if you come into a large sum of money.
Lottery taxes, like all taxes, are decided by the local/federal government where the ticket is physically purchased.
Taxes at source are deducted by the lottery organization prior to the prize being paid out to the winner. For example, if a player wins a US$5 million Mega Millions jackpot, then Mega Millions and the US government will take out 30% of that before the player is given the money. Thus the total prize you receive from Lotería Del Rey will be the prize post-tax.
Taxes not deducted at the source are referred to as "further local taxation": these taxes differ based on the player's country of residence and includes income tax and others. Local taxation is the responsibility of the individual player. In the event of a huge win, we advise winners to contact a financial advisor and accountant who can address local taxation issues.
While taxes on US lottery winnings differ depending on the state where the ticket is purchased, the following information is accurate for tickets purchased on Lotería Del Rey. The payout of prizes is based on tax laws in each individual state. Please note: currently a player cannot choose from which state their tickets are purchased for multi-state games. Information is presented for non-US residents only.
US Powerball – Lottery prizes are subject to taxation at source. There are three tax bands.
US Mega Millions – Lottery prizes are subject to taxation at source. There are three tax bands.
Check the tax laws in your country of residence for any further local taxation you may be subject to.
For taxed lotteries, you'll often see the phrase "lottery prizes are subject to taxation at source" in our results pages. This means that the taxes are deducted directly by the lottery organisation and the local and/or federal government where the lottery takes place. Prizes are paid out to the winners only after all taxes are deducted. Lotería Del Rey then deposits the full post-tax prize amount in the winner's account. Lotería Del Rey takes no commission on lottery prizes.
Often taxes deducted at the source are dependent on the amount of money won. The differing tiers are called Tax Bands. On each individual lottery results page, you'll see each tax band written out in the Tax Requirement section of the info table.
