Lottery winnings · Colorado
Colorado lottery tax calculator
Colorado taxes lottery winnings as ordinary income at its flat 4.40%, after the same allowance or deduction that applies to wages.
Lump sum: enter the cash option, not the advertised jackpot. Annuity: enter one year's payment.
The prize is stacked on top of this. It decides which bracket the winnings land in — and whether the 24% withheld was too much or too little.
What you keep after taxes
25.1% of the prize goes in tax · top federal rate 22.0%
- Prize
- $50,000
- Federal income tax on it
- −$10,350
- Colorado income tax on it
- −$2,200
- You keep
- $37,450
The cheque at claim
- Federal withheld (24.0% — proceeds over $5,000)
- −$12,000
- Colorado withheld (rule not transcribed yet)
- —
- Cheque
- $38,000
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At the counter
What is withheld in Colorado
Federal first, everywhere: on proceeds over $5,000 the payer withholds 24% of the whole amount — not the part over the line — and reports it on Form W-2G. That is a prepayment. The tax is settled on your return.
Colorado may also withhold state tax at the counter on larger prizes. That rule has not yet been transcribed from the state's own source, so the calculator shows the Colorado tax you will owe and leaves the at-claim line blank rather than guess.
Worked amounts
Three prizes, cheque and bill
| Prize | Cheque at claim | Federal tax | Colorado tax | You keep |
|---|---|---|---|---|
| $10,000 | $7,600* | −$1,550 | −$440 | $8,010 |
| $100,000 | $76,000* | −$22,114 | −$4,400 | $73,486 |
| $1,000,000 | $760,000* | −$337,180 | −$44,000 | $618,820 |
Single filer with $60,000 of other income for the year. * Federal withholding only — the Colorado at-claim rule has not been transcribed, so the real cheque may be smaller.
Questions
How much tax is taken from lottery winnings in Colorado?
Two layers. Federal: the payer withholds 24% on proceeds over $5,000, and the prize is then taxed on your return as ordinary income at the 2026 rates — up to 37%. State: Colorado taxes lottery winnings as ordinary income at its flat 4.40%, after the same allowance or deduction that applies to wages. Colorado may also withhold state tax at the counter on larger prizes. That rule has not yet been transcribed from the state's own source, so the calculator shows the Colorado tax you will owe and leaves the at-claim line blank rather than guess.
Does Colorado tax lottery winnings?
Colorado taxes lottery winnings as ordinary income at its flat 4.40%, after the same allowance or deduction that applies to wages.
What will the cheque be on a $100,000 prize in Colorado?
About $76,000 — the prize less $24,000 federal withholding. The tax actually owed for a single filer earning $60,000 elsewhere is about $26,514, so what you keep is $73,486. Your own figure depends on your other income and filing status.
Is the withholding the same as the tax?
No. Withholding is a prepayment at a flat rate the IRS sets for everyone. The tax is worked out on your return from your total income. If your bracket is above 24% you owe the difference in April; if it is below, the excess comes back as a refund. On a jackpot the gap is large — roughly a third of the federal tax is still owed after the 24% is taken.
Where these figures come from
- IRS Instructions for Forms W-2G and 5754 (Rev. January 2026) — regular gambling withholding, lotteries — read 2026-08-26
- 2026 Colorado Withholding Worksheet for Employers (DR 1098) — read 2026-08-20
Federal tax owed uses the 2026 rate schedules and standard deduction from Form 1040-ES. Colorado tax uses the same rules as our Colorado paycheck calculator. Not modelled: annuity maths, itemised deductions, local income taxes, non-resident rules. Estimates only — not tax advice.
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