Tax Requirements for Lottery Prizes
The Arizona Lottery is required to report all prizes of $600 or more to the Internal Revenue Service.
Federal Income Tax. For Arizona residents with tax ID numbers or Social Security numbers, the Arizona Lottery is required to withhold 24% for federal taxes.
Arizona State Income Tax. The Lottery is required by law to withhold 4.8% for state income taxes for United States citizens or non-residents. For non-resident aliens, the withholding tax stands at 30% federal and 6% state.
Tax Returns. According to the Internal Revenue Service, winnings from lotteries and raffles are considered gambling winnings. After the end of the year, the Arizona 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 and state taxes withheld to be reported as credits on the winner’s federal and state tax returns.
Additional Information. Additional information about taxation on lottery winnings can be found on the Internal Revenue Service website and at www.arizonalottery.com. If you have any questions, please consult a professional tax advisor.
How Do You Pay Taxes on Lottery Prizes Won through TheLotter Arizona?
Lottery prizes up to $600. Lottery prizes of up to $600 will be paid to winners shortly after receipt of the prize money from the Arizona Lottery. No taxes are due on lottery prizes under $600.
Lottery prizes over $600. All lottery prizes of $600 and up are collected by the winners personally at offices of the Arizona Lottery.
The Arizona Lottery withholds taxes on lottery prizes at source as detailed above.
TheLotter Arizona takes no commission on lottery prizes.