Lottery winnings · Montana
Montana lottery tax calculator
Montana taxes lottery winnings as ordinary income under its graduated schedule — the prize is stacked on your other income, so the rate depends on the total.
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
26.3% of the prize goes in tax · top federal rate 22.0%
- Prize
- $50,000
- Federal income tax on it
- −$10,350
- Montana income tax on it
- −$2,792
- You keep
- $36,858
The cheque at claim
- Federal withheld (24.0% — proceeds over $5,000)
- −$12,000
- Montana withheld (rule not transcribed yet)
- —
- Cheque
- $38,000
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At the counter
What is withheld in Montana
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.
Montana may also withhold state tax at the counter on larger prizes. That figure is not on this page yet, so the at-claim line is blank — what you see is the Montana tax you will owe on the prize, not what is taken at the window.
Worked amounts
Three prizes, cheque and bill
| Prize | Cheque at claim | Federal tax | Montana tax | You keep |
|---|---|---|---|---|
| $10,000 | $7,600* | −$1,550 | −$532 | $7,918 |
| $100,000 | $76,000* | −$22,114 | −$5,617 | $72,269 |
| $1,000,000 | $760,000* | −$337,180 | −$56,467 | $606,353 |
Single filer with $60,000 of other income for the year. * Federal withholding only — the Montana at-claim figure is not on this page yet, so the real cheque may be smaller.
Questions
How much tax is taken from lottery winnings in Montana?
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: Montana taxes lottery winnings as ordinary income under its graduated schedule — the prize is stacked on your other income, so the rate depends on the total. Montana may also withhold state tax at the counter on larger prizes. That figure is not on this page yet, so the at-claim line is blank — what you see is the Montana tax you will owe on the prize, not what is taken at the window.
Does Montana tax lottery winnings?
Montana taxes lottery winnings as ordinary income under its graduated schedule — the prize is stacked on your other income, so the rate depends on the total.
What will the cheque be on a $100,000 prize in Montana?
About $76,000 — the prize less $24,000 federal withholding. The tax actually owed for a single filer earning $60,000 elsewhere is about $27,731, so what you keep is $72,269. 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
- Montana Department of Revenue — Montana Employer and Information Agent Guide with Montana Withholding Tax Tables (V4 November 2025), "Montana Withholding Tax Formula", Annual Payroll Period — read 2026-09-05
Federal tax owed uses the 2026 rate schedules and standard deduction from Form 1040-ES. Montana tax uses the same rules as our Montana paycheck calculator. Not modelled: annuity maths, itemised deductions, local income taxes, non-resident rules. Estimates only — not tax advice.
Other states
Or start with the lottery tax calculator to compare the federal cheque, final tax bill and every state from one place.