what is the tax rate for lottery winnings in california
California State Lottery All prizes for Fantasy 5, Daily Derby, Daily 3, Daily 4, and non-jackpot SuperLotto Plus, Mega Millions, and Powerball prizes, are paid out in one payment, less 25% or 33% (depending upon the winner's tax documentation) Federal withholding if the prize is over $5,000. Merchandise prizes over $5,000 are subject to 33% Federal withholding. Scratchers tickets are generally one-payment prizes; however, some games have annuity options for payments each year, or per week. California does not tax California Lottery winnings, however it taxes lottery winnings from other jurisdictions.[47] For SuperLotto Plus and Mega Millions jackpots, the player may choose a single cash payout for a floating percentage of the jackpot, or an annuity. The SuperLotto Plus, Mega Millions, and Powerball payment schedule are on a graduated basis over 30 annual payments. Until 2005, when California joined Mega Millions, the payment choice on SuperLotto Plus had to be made when the ticket was bought. Since then, there is a 60-day window after winning, in which the choice of cash or annuity is to be made.
Taxation in the United States Taxes are imposed on net income of individuals and corporations by the federal, most state, and some local governments. Citizens and residents are taxed on worldwide income and allowed a credit for foreign taxes. Income subject to tax is determined under tax accounting rules, not financial accounting principles, and includes almost all income from whatever source. Most business expenses reduce taxable income, though limits apply to a few expenses. Individuals are permitted to reduce taxable income by personal allowances and certain non-business expenses, including home mortgage interest, state and local taxes, charitable contributions, and medical and certain other expenses incurred above certain percentages of income. State rules for determining taxable income often differ from federal rules. Federal tax rates vary from 10% to 39.6% of taxable income. State and local tax rates vary widely by jurisdiction, from 0% to 13.30% of income,[4] and many are graduated. State taxes are generally treated as a deductible expense for federal tax computation. In 2013, the top marginal income tax rate for a high-income California resident would be 52.9%.[5]