Tax Requirements for Lottery Prizes

The Florida Lottery is required to report all prizes of $600 or more to the Internal Revenue Service.

Federal Income Tax. The Florida Lottery is required to withhold 24 percent federal withholding tax from prizes greater than $5,000 if the winner is a citizen or resident alien of the U.S. with a Social Security number. If the prizewinner is a citizen or resident alien who does not have a Social Security number, the Florida Lottery is required to withhold 24 percent backup federal withholding tax from any prize of more than $600. For nonresident aliens, the Florida Lottery is required to withhold 30 percent federal withholding tax from all prize amounts over $600.

Tax Returns. According to the Internal Revenue Service, winnings from lotteries and raffles are considered gambling winnings. After the end of the year, the Florida Lottery will send each winner a Form W2-G report showing the amount of lottery prize payments to be reported as income and the amounts of federal taxes withheld to be reported as credits on the winner’s federal tax returns.

Additional Information. Additional information about taxation on lottery winnings can be found on the Internal Revenue Service website. If you have any questions, please consult a professional tax advisor.