Tax Requirements for Lottery Prizes

The Oregon Lottery is required to report all prizes of $600 or more to the Internal Revenue Service.

Oregon State Income Tax. For prizes over $1,500, the Oregon Lottery is required to withhold 8% for state taxes.

Federal Income Tax. For prizes over $5,000, and for Oregon residents with tax ID numbers or Social Security numbers, the Oregon Lottery is required to withhold 25% for federal taxes. The federal tax withholding rate is 30% for non-residents and winners who do not furnish a taxpayer identification (social security) number.

Tax Returns. According to the Internal Revenue Service, winnings from lotteries and raffles are considered gambling winnings. After the end of the year, the Oregon Lottery will send each winner a Form W2-G report showing the amount of lottery prize payments to be reported as income and the amounts of federal and state taxes withheld to be reported as credits on the winner’s federal and state tax returns.

Additional Information. Additional information about taxation on lottery winnings can be found on the Internal Revenue Service website and the Oregon Lottery website. If you have any questions, please consult a professional tax advisor.

How Do You Pay Taxes on Lottery Prizes Won through theLotter Oregon?

Lottery prizes up to $600. Lottery prizes of up to $600 will be paid to winners shortly after receipt of the prize money from the Oregon Lottery. No taxes are due on lottery prizes under $600.

Lottery prizes over $600. All lottery prizes of $600 and up are collected by the winner personally at offices of the Oregon Lottery. theLotter Oregon will advise winners, where possible, in the win collection process.

The Oregon Lottery withholds 8% for state taxes on prizes over $1,500. In addition, the lottery withholds 25% for federal taxes from prizes over $5,000 for Oregon residents with tax ID numbers or Social Security numbers; and 30% for non-residents and winners who do not furnish a taxpayer identification (social security) number. These taxes are withheld at source, which means that the taxes are deducted directly by the Oregon Lottery before they are awarded to winners.

theLotter Oregon takes no commission on lottery prizes.