Lottery Tax Calculator (US federal + state, South Korea 22%/33%, or a flat rate)

Understanding the lottery tax calculator — concept and principle

This calculator estimates the tax on a lottery prize and what you keep. It covers the United States (federal income tax at 2026 rates plus your state rate), South Korea (fixed withholding rates) and other countries with a flat rate you enter. It also shows how much is withheld when you collect and, in the US, what may still be due at filing.

Federal and 4% state tax take $380,244.43 (38%); only $240,000 is withheld up front.

How it is calculated

Taxable winnings = prize − ticket price.
US federal: tax on (other income + winnings) − tax on other income alone, using the 2026 brackets for single filers (10% to 12,400; 12% to 50,400; 22% to 105,700; 24% to 201,775; 32% to 256,225; 35% to 640,600; 37% above) or married filing jointly. State tax = your rate × winnings. Withholding = 24% of winnings over 5,000 USD.
South Korea: prizes up to 2 million won are not taxed; above that, 20% income tax on the first 300 million won and 30% above, plus local income tax of 10% of the income tax.
Other: flat rate × winnings.

The principle

In the US, a lottery prize is ordinary income. It sits on top of your other income, so most of it falls in the highest brackets. The 24% withheld is only a prepayment; the real tax is settled on your return. Korea taxes lottery prizes separately at fixed rates and withholds the full amount.

Worked example

Default inputs: United States, single, prize 1,000,000 USD, ticket 2 USD, other income 60,000 USD, state 4%.

Winnings = 999,998 USD; total taxable income = 1,059,998 USD, top bracket 37%.
Federal tax on the winnings = tax(1,059,998) − tax(60,000) ≈ 340,244.51 USD.
State tax = 4% × 999,998 = 39,999.92 USD. Total tax = 380,244.43 USD (effective 38%).
Prize after tax = 1,000,000 − 380,244.43 = 619,755.57 USD.
Withheld at collection = 24% × 999,998 = 239,999.52 USD, so about 100,244.99 USD more is due at filing.

Each point is the calculator re-run with only “Prize you receive (before tax)” changed; the gold point is the default example. Change the inputs above and this chart follows your numbers.

Prize you receive (before tax)	Prize after tax
250,000	$170,643.53
500,000	$323,143.53
750,000	$472,255.57
1e+06	$619,755.57
1.25e+06	$767,255.57
1.5e+06	$914,755.57
2e+06	$1,209,755.57

How to read the result

For a large US prize, the gap between 24% withholding and a 37% top rate is a common surprise; set the difference aside. State rates vary widely, and some states do not tax lottery winnings. In Korea, the amount you receive is final after withholding.

Common mistakes

Assuming the 24% withholding is the final tax.
Forgetting state or local tax.
Ignoring that other income moves the winnings into a higher bracket.
Treating gifts of winnings to family as tax-free; gift tax rules may apply.

Keep in mind: Simplified estimate; deductions for gambling losses, credits and gift tax are not included. Tax law changes. This is not tax advice; consult a tax professional.

Frequently asked questions

How much tax do you pay on a 1 million dollar lottery win?

With the defaults, about 38% in total (federal plus 4% state), leaving roughly 620,000 USD.

Are lottery winnings taxed in Korea?

Yes. Above 2 million won, 22% (including local tax) applies up to 300 million won and 33% on the part above.

Is the ticket price deductible?

The cost of the winning ticket reduces the taxable amount, as used here.

Sources: IRS, Rev. Proc. 2025-32 (2026 inflation adjustments) and Publication 525 · 소득세법 제84조(기타소득의 과세최저한), 제129조(원천징수세율)

Checked 9 Nov 2026. US: IRS Rev. Proc. 2025-32 (2026 tax rate tables); IRS Instructions for Forms W-2G and 5754 (Rev. January 2026): 24% regular gambling withholding on lottery winnings minus the wager above 5,000 USD. South Korea: Income Tax Act (소득세법) art. 129(1)6 (30% on the part of the income above 300 million won; 20% otherwise) and the winners’ guide of Dong-hang Lottery (22% above 2 million won, 33% above 300 million won, local income tax included).

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