Arkansas Lottery Tax Calculator 2026
Arkansas imposes a flat 6% state income tax on lottery winnings—no progressive brackets, no city add-ons. Combined with federal tax (withholding at 24%, actual rate up to 37%), that can mean a sizable chunk of a big win goes to taxes. This calculator shows your estimated take-home and the gap between what's withheld and what you may still owe at filing so you can plan ahead.
Arkansas's 6% Flat Rate: Middle of the Pack
Arkansas uses a 6% state income tax on lottery winnings. On a $60 million lump sum, that's $3.6 million in state tax. It's not the lowest—states like Texas, Tennessee, Florida, and Nevada charge 0% state tax on lottery winnings—but it's not the highest either. Oregon (10%), New York (10.9% plus NYC), and New Jersey (10.75%) take a much larger slice. Arkansas sits alongside states like Georgia (5.19%), Louisiana, and others in the mid-range. So you're paying a meaningful state bite, but not the worst in the country.
Example: $100 Million Advertised Jackpot (Cash Option ~$60M)
We ran the numbers. Lump sum ≈ $60M. Federal at 37%: $22.2M. Arkansas at 6%: $3.6M. Total tax ≈ $25.8M; take-home ≈ $34.2M. The lottery withholds 24% federally ($14.4M), so you get a reduced check and still owe about $7.8M in additional federal tax at filing. Arkansas's 6% is typically withheld at payout, so the full $3.6M state tax is usually already taken. The main planning focus is the federal gap—set it aside or make estimated payments to avoid penalties.
| Item | Amount |
|---|---|
| Lump sum (example) | $60,000,000 |
| Federal tax (37%) | $22,200,000 |
| Arkansas state tax (6%) | $3,600,000 |
| Total tax | $25,800,000 |
| Take-home | ≈ $34,200,000 |
| Federal withheld (24%) | $14,400,000 |
| Additional federal due at filing | ≈ $7,800,000 |
Arkansas Scholarship Lottery: Education and Funding
The Arkansas Scholarship Lottery started in 2009. Net revenue supports scholarships for Arkansas students (e.g. Arkansas Academic Challenge Scholarship) and other education-related programs. The 6% you pay in state income tax on winnings is part of the state's general revenue structure—same as tax on wages or other income. Knowing where the money goes doesn't change your obligation, but it's the context many Arkansans care about.
Federal Withholding vs. Arkansas: Two Separate Hits
When you claim a big prize in Arkansas, two things happen at payout: the lottery withholds 24% for the IRS and Arkansas takes its 6% (or the applicable withholding). So you receive the remainder. Your actual federal liability can be 37%, so the 13-point gap (on the taxable amount) is due when you file. Arkansas's 6% is usually fully withheld, so you're less likely to have a state shortfall. The federal gap is the one that catches people off guard—plan for it early.
Lump Sum vs. Annuity in Arkansas
Arkansas taxes both at 6%. The real difference is federal. A lump sum can push you into the 37% bracket in one year; an annuity spreads payments over up to 30 years and may keep more in lower federal brackets. State side, each annuity payment is subject to 6% and withholding. If you're deciding, run both scenarios with a CPA.
Arkansas vs. Neighbors: Texas, Tennessee, Missouri, Louisiana
Texas and Tennessee have no state income tax on lottery winnings (0%). So the same $60M win would cost $0 state tax there and $3.6M in Arkansas. Missouri has a progressive system with a top rate around 4.95%. Louisiana is in a similar range. Mississippi is around 5%. So Arkansas's 6% is on the higher side among neighboring states. Residency matters: if you're an Arkansas resident when you win and claim, you owe Arkansas tax on that prize even if you move later.
Planning Before You Claim
You can't avoid Arkansas's 6% on lottery winnings—it's mandatory. You can plan for the rest. Don't claim immediately. Consult a tax attorney and a CPA who've handled large windfalls. Use this calculator to see your total tax and the federal gap. Plan to pay the additional federal tax at filing (and consider estimated payments). Decide whether to claim as an individual or through a trust or entity if allowed by the Arkansas Lottery. Residency: if you move after winning, you still owe Arkansas tax on the prize you claimed as a resident.
Arkansas Lottery Tax FAQ
Q:What is Arkansas's state tax rate on lottery winnings?
Arkansas imposes a flat 6% state income tax on lottery prizes. It's in addition to federal tax and is typically withheld by the lottery at payout.
Q:Do I owe Arkansas taxes if I buy a ticket in Arkansas but live elsewhere?
Generally you owe tax to your state of residence. If you're not an Arkansas resident, you'd typically report the win to your home state. For multi-state situations, consult a tax professional.
Q:What's the combined federal and Arkansas tax rate on lottery winnings?
Federal can reach 37% and Arkansas adds 6%, so combined you can be looking at about 43%. Federal withholding is only 24%, so you may owe a significant amount at filing.
Q:Is the 6% the same for lump sum and annuity?
Yes. Arkansas taxes both at 6%. The difference is timing and federal tax: an annuity may help spread federal brackets over 30 years, but Arkansas's 6% applies to each payment.
Q:Can I reduce or defer Arkansas's 6% lottery tax?
No. The 6% is mandatory and can't be deferred. Federal planning (lump sum vs. annuity, estimated payments) can still help your overall situation.
Q:If I move out of Arkansas after winning, do I still owe the 6%?
Yes. If you claimed the prize as an Arkansas resident, you owe Arkansas tax on that win. Moving later doesn't eliminate the obligation for that prize.
Q:What does Arkansas use lottery tax revenue for?
Arkansas lottery revenue supports state education and scholarships (e.g. Arkansas Academic Challenge Scholarship). The income tax you pay on winnings is part of the state's revenue that funds those programs.