New Jersey State Income Tax Rate on Lottery Winnings 2026 Calculator
The New Jersey state income tax rate on lottery winnings 2026 is 10.75%. This calculator shows you your exact after-tax take-home from Powerball, Mega Millions, and other New Jersey lottery games, including both federal and state taxes.
Is New Jersey Lottery Taxable?
Yes β but only for prize amounts that exceed $10,000. Prizes of $10,000 or less are excluded from New Jersey gross income tax.
NJ Lottery State Withholding (5% / 8%)
If a prize is taxable (over $10,000), the entire payout is subject to NJ withholding: 5% for payouts between $10,001 and $500,000 and 8% for payouts over $500,000.
Estimated NJ State Tax vs. Withholding
New Jersey income tax is graduated. This calculator uses a conservative top-bracket estimate (10.75%) for state tax, and separately shows the NJ Lottery withholding so you can see any potential gap.
Federal Tax: Withholding vs. Final
Federal withholding is commonly 24% at payout for larger prizes, but the final federal tax depends on your total taxable income and can be higher (up to 37%).
New Jersey Lottery Tax FAQ
Q:Are New Jersey Lottery prizes taxable?
Yes, New Jersey Lottery prizes over $10,000 are taxable for NJ gross income tax purposes. Prizes of $10,000 or less are excluded.
Q:What is New Jersey Lottery state withholding?
If the prize is taxable (over $10,000), NJ Lottery withholds 5% for payouts $10,001β$500,000 and 8% for payouts over $500,000 (on the entire payout).
Q:Why can the estimated NJ tax be higher than the withholding?
Because withholding is an estimated prepayment. NJ income tax is graduated; this calculator uses a conservative top-bracket estimate (10.75%) for state tax and shows the withholding separately.