How much tax do you pay on scratch-off winnings in New York?

In New York, scratch-off prizes over $5,000 (after subtracting the ticket cost) face automatic withholding: 24% federal tax plus 8.82% New York State tax. If you live in New York City, add 3.876% NYC tax. That's a combined withholding of 32.82% outside NYC or 36.696% inside NYC. Prizes between $600-$5,000 are reported to the IRS but not automatically withheld — you still owe the tax when you file.

Do you pay taxes on scratch-off winnings under $600?

Technically, yes — all gambling winnings are taxable income under federal law, regardless of amount. However, prizes under $600 are not reported to the IRS by the lottery, and no withholding occurs. You are supposed to report them as income on your tax return, but there is no Form W-2G issued for amounts under $600.

Can you deduct losing scratch-off tickets on your taxes?

Yes, but only if you itemize deductions on your federal tax return (Schedule A), and only up to the amount of your gambling winnings. You cannot deduct more than you won. For example, if you won $2,000 and spent $3,000 on tickets, you can deduct $2,000 in losses to offset the $2,000 in winnings, but not the extra $1,000. Keep your losing tickets as documentation.

How much do you take home on a $1 million scratch-off win in New York?

On a $1 million scratch-off win in New York (outside NYC), automatic withholding takes about $328,200 (24% federal + 8.82% state), leaving you approximately $671,800 as your initial payout. Your actual tax bill depends on your total income and filing status — you may owe more at tax time if you're in a higher bracket, or get some back if you're in a lower one. NYC residents lose an additional ~$38,760 to city tax.

At what amount does the NY Lottery withhold taxes on scratch-offs?

The New York Lottery automatically withholds taxes on prizes exceeding $5,000 (net of the wager amount). For a $5 scratch-off ticket with a $5,005 or larger prize, withholding applies. Prizes from $600 to $5,000 generate a W-2G tax form but no automatic withholding — you pay at tax time. Prizes under $600 have no reporting or withholding.

NY Scratch-Off Tax Calculator: How Much Do You Actually Keep?

March 26, 2026 Taxes NY Law Calculator

You just scratched a winner. Maybe $500. Maybe $50,000. Maybe $1,000,000. The first thought after the initial shock is always the same: "How much do I actually get to keep?"

The answer depends on the size of the prize and where you live in New York. The state and federal government both take a cut, and if you live in New York City, the city wants its share too. Here is exactly how it works.

Scratch-Off Tax Calculator

Prize Amount ($)

Where Do You Live?

Gross Prize

Federal Tax (24%)

NY State Tax (8.82%)

Estimated Take-Home

* Withholding amounts shown. Actual tax owed depends on your total income and filing status. Prizes under $5,001 are not automatically withheld but are still taxable. Consult a tax professional for your specific situation.

The Three Tax Layers in New York

New York scratch-off winners face up to three levels of taxation on prizes above $5,000:

Tax	Rate	Who Pays
Federal Income Tax	24% (withholding)	All US residents
New York State Tax	8.82%	All NY residents
New York City Tax	3.876%	NYC residents only
Yonkers Tax	1.477%	Yonkers residents only

Important: withholding vs. actual tax

The 24% federal rate is a withholding rate — it is taken out immediately when you claim the prize. Your actual federal tax rate depends on your total income and filing status. If you are in the 32% or 37% federal bracket, you will owe additional tax when you file. If you are in a lower bracket, you might get some back. The state and city rates shown are also withholding rates.

Tax by Prize Size: What Actually Happens

Not all prizes are taxed the same way. Here is how the thresholds work:

Prizes Under $600

No reporting, no withholding. You scratch, you win, you pocket the cash. The lottery does not report anything to the IRS. You are technically supposed to report this as income on your tax return, but no form is issued.

Prizes $600 to $5,000

The lottery issues a W-2G form reporting the income to the IRS and New York State. However, no tax is automatically withheld. You collect the full amount and owe the tax when you file your return. This catches many people off guard — you get the full check now but need to set aside money for April.

The $600–$5,000 trap

Win $2,000 and you get a check for $2,000. But come tax time, you owe roughly $657 in combined taxes (24% fed + 8.82% state). If you are in NYC, that jumps to $735. Set that money aside the day you win. Do not spend it.

Prizes Over $5,000

Taxes are automatically withheld before you receive your check. The lottery takes out 24% federal and 8.82% state right away. NYC and Yonkers residents have their local tax withheld too. You receive the net amount.

Quick Reference: Take-Home on Common Wins

Prize Won	Take-Home (NYS)	Take-Home (NYC)	Total Tax Rate
$500	$500*	$500*	0% withheld*
$1,000	$1,000*	$1,000*	0% withheld*
$5,000	$5,000*	$5,000*	0% withheld*
$10,000	$6,718	$6,330	32.82–36.70%
$25,000	$16,795	$15,826	32.82–36.70%
$50,000	$33,590	$31,652	32.82–36.70%
$100,000	$67,180	$63,304	32.82–36.70%
$500,000	$335,900	$316,520	32.82–36.70%
$1,000,000	$671,800	$633,040	32.82–36.70%
$5,000,000	$3,359,000	$3,165,200	32.82–36.70%
$10,000,000	$6,718,000	$6,330,400	32.82–36.70%

* Prizes $600–$5,000: Full amount paid out but W-2G issued. You owe tax when filing. Prizes under $600: No reporting. All figures are estimates based on withholding rates and do not account for your overall tax bracket.

The NYC penalty is real

On a $1,000,000 scratch-off win, living in New York City costs you an extra $38,760 compared to living anywhere else in New York State. On a $10,000,000 win, the NYC tax alone is $387,600. Same ticket, same store, different zip code.

Can You Deduct Losing Tickets?

Yes — with major limitations. Under federal tax law, you can deduct gambling losses, but only if you:

Itemize deductions on your federal return (Schedule A). The standard deduction for 2026 is $15,000 for single filers. If you do not itemize, you cannot deduct losses.
Only deduct up to the amount you won. If you won $2,000 and spent $5,000 on tickets, you can deduct $2,000 in losses — not $5,000. You cannot show a net gambling loss on your return.
Keep records. The IRS requires documentation. Save your losing tickets, store receipts, or a log of your purchases.

Keep your losing tickets

If you win $5,000 and can document $3,000 in losses from scratch-off tickets purchased during the same tax year, you can reduce your taxable gambling income from $5,000 to $2,000. That saves you roughly $657 in combined taxes (outside NYC). It pays to keep a shoebox of losers.

How to Claim Prizes in New York

The claiming process depends on how much you won:

Prize Amount	Where to Claim	What You Need
$1–$600	Any lottery retailer	Winning ticket
$601–$5,000	Any lottery retailer or NY Lottery Customer Service Center	Winning ticket, valid ID
$5,001+	NY Lottery Customer Service Center or mail claim	Winning ticket, valid ID, completed claim form, Social Security number

New York Lottery Customer Service Centers are located in:

Schenectady — One Broadway Center, Schenectady, NY 12301
Garden City — (Long Island) 15 Vanderventer Avenue, Suite 1
New York City — varies by appointment

For prizes over $5,000, you can also claim by mail. Send the signed ticket, a completed claim form (from nylottery.ny.gov), a copy of your ID, and your Social Security number to the Schenectady office. Use certified mail and keep copies of everything.

Sign the back of your winning ticket immediately. An unsigned ticket is a bearer instrument — whoever holds it can claim it. Your signature makes it yours.

Anonymity: Can You Stay Anonymous in New York?

As of 2024, New York allows lottery winners of $10,000 or more to remain anonymous under the state's Right to Privacy law. Prior to this change, all New York lottery winners were publicly identified. If you win big, you can now claim your prize without your name and hometown being published.

This applies to scratch-off games as well as draw games. You still need to provide your identity to the lottery commission for tax and verification purposes, but your name will not be released to the public or media unless you consent.

Tax Planning Tips for Big Winners

If you hit a prize of $10,000 or more, consider these steps:

Do not rush to claim. You have one year from the game's end date. Take a week to think and plan.
Consult a tax professional. A CPA or tax attorney can help you understand your actual (not just withheld) tax rate and plan for the April bill.
Gather your losing tickets. Every documented loss reduces your taxable gambling income.
Consider estimated tax payments. If the withholding is less than what you actually owe (common for high earners), you may need to make estimated payments to avoid a penalty.
Separate the money. Put the estimated tax owed in a savings account immediately. Do not spend it.

Bottom Line

Taxes take a significant bite out of scratch-off winnings in New York — at minimum 32.82% on prizes over $5,000, and up to 36.7% if you live in NYC. The key numbers to remember:

Under $600: Yours, no reporting
$600–$5,000: Full payout now, tax bill later (W-2G issued)
Over $5,000: 24% federal + 8.82% state withheld automatically
NYC residents: Add 3.876% city tax
Losers are deductible — up to your winnings, if you itemize

Use the calculator above to see your estimated take-home on any prize amount. And remember: these are withholding amounts. Your actual tax bill depends on your full financial picture.

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This article is for informational purposes only and does not constitute tax advice. Tax rates as of March 2026. Consult a qualified tax professional for advice on your specific situation. Data sourced from nylottery.ny.gov, irs.gov, and tax.ny.gov.

Alex P.

Lead Data Analyst at ScratchOffsNY

Alex builds the Smart Score model and analyzes scratch-off data daily using official NY Lottery prize reports and open data APIs. All rankings are based on math, not gut feeling. Learn about our methodology.