“The IRS is required to withhold 24% from the winnings, but that doesn't mean whoever wins and chooses the lump sum option is done paying taxes,” Pagliarini explained in an email.

You'll fall into the highest tax bracket in the year you win if you take the jackpot in a lump sum. As of 2022, this means you'll likely owe the IRS at least 37% in taxes.

Will I have to pay taxes on my prize? The Hoosier Lottery withholds 24 percent in federal tax if the winnings minus the wager are more than $5,000 and 3.23 percent in state tax on any winnings that exceed $1,200.

Redeem at participating Hoosier Lottery retailers (most retailers will redeem tickets up to $25, and some will redeem up to $599)....Make a copy of the following: Completed winner claim form. Front and back of your winning ticket. Valid Government Issued Photo ID (for prize amounts of $600 or more)

The Indiana rate is 3.23% If you don't get a W-2G, you still have to claim your winnings as income if they qualify. You can deduct your losses on your federal return, but you must itemize.

How can I redeem winning tickets? For prizes under $600, you can either redeem your winning ticket at a Hoosier Lottery retailer or claim your prize by mail. (We suggest contacting the retailer, as some may have changed store hours and/or redemption policies during the current health emergency).

Up Your Game With the Hoosier Lottery App In addition to scanning tickets to check their winning status and enter my2ndChance promotions, the app has lots of other benefits.

The cash option is approximately 40-50%less than the annuitized jackpot because it does not include the interest that would have accumulated over 25 years if it was invested by the Hoosier Lottery.

That's because when anyone wins the lottery, the IRS withholds 24% of the winnings off the top. With a really large jackpot, if the winner opted for the lump sum cash value, they would be subject to federal income tax at the top tax rate, which is 37%.