Texas(TX) Lotto Prize Analysis for Wed Jan 27, 2021
As legally required by the state of Texas, taxes are withheld on lottery winnings of $600.00 or more. For prizes over $5,000.00, US citizens and resident aliens with a social security number are subject to a 25% deduction to their prizes, which represents federal taxes. Luckily, lottery prizes are exempt from Texas state and local personal income taxes. For more information on taxes for lottery winnings in the state of Texas, click here.
- Choose Payment Option: The Texas Lotto players have to choose either “Cash Value Option” or 25 annual payments while purchasing the Lotto Texas ticket. If no payment options selected, the purchase will be rejected.
- For the Cash Option in the amount of $4,190,000, the federal tax that must be withheld is $1,047,500. There is no state tax for lottery prizes in the state of Texas. After all the taxes are paid, the winner gets a net lump-sum payment of $3,142,500.
- Annuity: If the winner chooses annuity in the amount of $5,250,000, the winner gets paid in 25 annual installments amounting to $210,000.00 yearly. The federal tax amounts to $52,500.00 yearly. The winner will receive, after paying all the taxes, $157,500.00 yearly.