Do you have to pay tax on lottery winnings? Well, here comes my favourite answer – It depends. If you win the lottery in the USA, you do. You have pay tax on any winnings above $5000.00. In fact the top federal tax rate is a whopping 37% on winnings of more than $500,000.00 for individuals ($600,000.00 for married couples who file a joint tax return). This means people winning a million bucks have to pay about $37 million to the IRS if they take the lump sum, which is why many people opt to be paid in installments.
I think it would still be worth winning though.