Colorado Lottery Tax Calculator 2025
Instantly estimate federal & Colorado state taxes on your Powerball, Mega Millions, or Colorado Lotto+ jackpot winnings.
| Description | Amount |
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| Enter a jackpot amount and click Calculate | |
| Year | Gross Payment | Fed Tax | CO Tax | Net |
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| Click calculate first | ||||
How the Colorado Lottery Tax Calculator Works
Our free calculator estimates federal and Colorado state taxes on your lottery winnings. Enter your jackpot amount, choose your game, and see an instant breakdown of taxes owed and your net payout.
Colorado State Tax on Lottery Winnings
Colorado imposes a flat 4.40% state income tax on lottery winnings in 2025. This applies to all gambling and lottery income earned in the state, regardless of your filing status.
Federal Tax on Lottery Winnings
The IRS requires 24% federal withholding on lottery prizes over $5,000. However, large jackpots fall into the 37% top marginal bracket for 2025, meaning you may owe additional taxes when you file your return.
Cash Option vs. Annuity
Most winners choose the cash (lump-sum) option, which is typically 50–70% of the advertised jackpot. The annuity option pays the full jackpot over 30 annual payments that increase by 5% each year.
2025 Federal Tax Brackets (Single Filer)
- 10% — up to $11,925
- 12% — $11,926 to $48,475
- 22% — $48,476 to $103,350
- 24% — $103,351 to $197,300
- 32% — $197,301 to $250,525
- 35% — $250,526 to $626,350
- 37% — over $626,350
Frequently Asked Questions
Does Colorado tax lottery winnings?
Yes. Colorado taxes all lottery winnings at a flat rate of 4.40% for the 2025 tax year. There are no local/city taxes on lottery income in Colorado.
What is the federal tax rate on lottery winnings?
The IRS withholds 24% upfront. However, the effective rate can be higher (up to 37%) because large winnings push income into the top marginal bracket.
Should I take the lump sum or annuity?
The lump sum gives you immediate access to funds but at a reduced amount. The annuity provides the full jackpot over 30 years with annual increases. Consider consulting a financial advisor for your specific situation.
Are lottery winnings taxed differently from regular income?
No. Lottery winnings are treated as ordinary income by both the IRS and Colorado. They are added to your other income and taxed at applicable marginal rates.