Nebraska Lottery Tax

Nebraska tax4.55%#24 highest of 38 states
Federal withholding24%on prizes of $5,000 or more
Top federal rate37%owed on a big prize at tax time
IRS form W-2G$2,000+prizes the lottery reports

Nebraska counts lottery prizes as income and taxes them at 4.55%. 3.5% is withheld at claim. The IRS taxes every prize as income: the lottery withholds 24% from prizes of $5,000 or more, and a big prize puts you in the top bracket (37%), so the rest is due when you file.

What you keep in Nebraska

Prize	Federal (37%)	Nebraska (4.55%)	You keep
$1,000	−$370	−$45.50	$584.50
$10,000	−$3,700	−$455	$5,845
$100,000	−$37,000	−$4,550	$58,450
$1,000,000	−$370,000	−$45,500	$584,500

Estimate at the top federal rate. Smaller prizes are taxed at your own bracket, so you may owe less; city or county taxes are not included unless the note above says so.

If you win the jackpot in Nebraska

$562 Million jackpot

Cash value: $230M
Federal tax: −$85.2M
Nebraska tax: −$10.5M
You keep: $135M

Cash or annuity: Powerball payout calculator

$403 Million jackpot

Cash value: $162M
Federal tax: −$60M
Nebraska tax: −$7.4M
You keep: $94.7M

Cash or annuity: Mega Millions payout calculator

$2.2 Million jackpot

Cash value: $900K
Federal tax: −$333K
Nebraska tax: −$41K
You keep: $526K

Lottery tax by state

38 states tax lottery prizes, from 2.5% to 10.9%. 8 do not: California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.

Rates as of October 13, 2026. revenue.nebraska.gov, IRS. Not tax advice: ask a tax professional before you claim a big prize.