North Carolina State Income Tax Rate on Lottery Winnings 2026 Calculator
The North Carolina state income tax rate on lottery winnings 2026 is 3.99%. This calculator shows you your exact after-tax take-home from Powerball, Mega Millions, and other North Carolina lottery games, including both federal and state taxes.
North Carolina’s 3.99% State Tax (2026)
North Carolina applies a flat 3.99% state income tax rate in 2026. For example, on a $60M lump-sum amount, 3.99% is about $2.394M in North Carolina state tax (before credits/withholding).
Total Tax Burden
For very large wins, a common estimate is up to 37% federal plus 3.99% North Carolina, for a combined estimate around 40.99% on the lump-sum amount. Federal withholding is typically 24%, so you may owe more at filing time depending on your full-year income.
Tar Heel State Lottery
North Carolina Lottery generates revenue for education.
Withholding
Federal withholding is typically 24% at payout for larger prizes, but your final federal tax can be higher. North Carolina state tax is reconciled on your return; withholding (if any) is a credit, not the final tax.
Lump Sum vs Annuity
North Carolina applies the same state income tax rate either way; the bigger difference is usually timing and federal planning.
Regional Comparison
North Carolina’s 2026 flat rate (3.99%) is lower than many states that tax lottery winnings, but higher than no-income-tax states.
Tax Planning
Consult professionals before claiming.
North Carolina Games
Powerball, Mega Millions, and NC Lottery games are generally treated as taxable income for federal and North Carolina tax purposes.
North Carolina Lottery Tax FAQ
Q:North Carolina's tax rate?
North Carolina uses a flat income tax rate. For 2026, the flat rate is 3.99%, and lottery winnings are generally treated as taxable income in North Carolina (in addition to federal taxes).
Q:Total tax?
For very large wins, a common estimate is up to 37% federal plus 3.99% North Carolina, for a combined estimate around 40.99% on the lump-sum amount. Your final total depends on your full-year income and filing details.
Q:Lump sum vs annuity?
North Carolina applies the same state income tax rate either way; the bigger differences are timing and federal planning.
Q:Reduce it?
State income tax generally applies if you owe North Carolina income tax. Planning can help you set aside funds and avoid underpayment surprises.
Q:Move after?
Moving after the win doesn’t retroactively change what you owed for the prize year. For large wins, get personalized guidance on residency and filing.
Q:Regional comparison?
North Carolina’s 2026 flat rate (3.99%) is lower than many states that tax lottery winnings, but higher than no-income-tax states.
Q:Revenue?
North Carolina lottery supports education.