New Hampshire does not tax lottery winnings. The state has no broad-based personal income tax, and its former interest and dividends tax was fully repealed for taxable periods beginning after December 31, 2024, so no state-level levy applies to a prize won in New Hampshire.1NH Department of Revenue Administration. Interest and Dividends Tax Federal tax still applies, however, and the IRS treats lottery prizes as ordinary income taxed at rates that can reach 37%.
What New Hampshire Itself Takes
Nothing. Whether you win $100 on a scratch ticket or a multi-million-dollar Powerball jackpot, the New Hampshire Lottery Commission does not withhold any state tax from your payout, and you owe none when you file. The interest and dividends tax under RSA 77, the last remaining form of personal income taxation in the state, no longer exists as of January 1, 2025, and even while it existed it applied only to investment income, not to gambling prizes.1NH Department of Revenue Administration. Interest and Dividends Tax
Your only tax obligation on a New Hampshire lottery prize runs to the federal government.
Federal Withholding at the Time You Claim
Federal law requires any state-conducted lottery to withhold 24% of net winnings (the prize minus the cost of the ticket) whenever those net winnings exceed $5,000.2Office of the Law Revision Counsel. 26 U.S. Code 3402 – Income Tax Collected at Source The New Hampshire Lottery Commission handles this before you receive your check and sends the money directly to the IRS.
Win $10,000 on a $2 ticket, and net winnings of $9,998 cross the threshold; roughly $2,400 goes to the IRS and you take home the rest. Below the $5,000 mark, no automatic withholding happens, but the prize is still taxable income that you have to report.
What You Actually Owe: 2026 Federal Brackets
That 24% is an advance payment, not a settled bill. Lottery winnings stack on top of your other income, and your true rate depends on your total for the year. For 2026, a single filer faces these brackets:3Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
- 10% up to $12,400
- 12% from $12,401 to $50,400
- 22% from $50,401 to $105,700
- 24% from $105,701 to $201,775
- 32% from $201,776 to $256,225
- 35% from $256,226 to $640,600
- 37% above $640,600
Married couples filing jointly hit the 37% rate above $768,700.3Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 A significant jackpot pushes most of the prize into the top bracket, which means the 24% already withheld will fall short of what you owe. The difference comes due when you file, or sooner if you’re required to make estimated payments.
Lump Sum or Annuity
Most large jackpots let you choose a single lump sum (the “cash option”) or an annuity paid over roughly 30 years. The lump sum runs substantially smaller than the advertised jackpot, typically around half, because the headline number totals all the annuity payments.
Take the lump sum and the entire amount hits your income in one year, almost guaranteeing the top 37% rate on most of it. Take the annuity and each yearly payment is taxed in the year you receive it, which can keep some payments in lower brackets depending on your other income, though large payments from major jackpots will still reach the top rate. Neither route avoids federal tax; the choice is about timing.
Form W-2G and Reporting the Income
The lottery commission issues IRS Form W-2G to document the prize and any tax withheld. Starting in 2026, the reporting threshold for gambling winnings rose to $2,000 (up from $600), and it will adjust for inflation going forward.4Internal Revenue Service. Instructions for Forms W-2G and 5754 (01/2026) For lottery prizes, a W-2G is required when winnings meet or exceed $2,000 and are at least 300 times the wager. To claim any reportable prize, you’ll need to provide a valid taxpayer identification number and photo ID.5Legal Information Institute. New Hampshire Code Lot 602.01 – Payments A copy of the W-2G goes to the IRS, so the agency already has the numbers before you file.
Report the winnings on Schedule 1 of your Form 1040; the 2025 Schedule 1 has a dedicated line for gambling income (line 8b) that flows into total additional income on line 10 and then onto your 1040.6Internal Revenue Service. 2025 Schedule 1 (Form 1040) – Additional Income and Adjustments to Income Any tax already withheld gets credited in the “Federal Income Tax Withheld” section of the 1040. If withholding exceeded your actual liability, you get a refund; if it fell short, you owe the balance by the filing deadline and can submit payment with Form 1040-V.7Internal Revenue Service. About Form 1040-V, Payment Voucher for Individuals
Prizes below the W-2G threshold are still taxable. You must report all gambling income regardless of whether a W-2G was issued.8Internal Revenue Service. Topic No. 419, Gambling Income and Losses
Estimated Payments if You Win Mid-Year
A gap between 24% withheld and 37% owed can trigger a requirement to make estimated tax payments during the year. You generally have to make estimated payments if you expect to owe at least $1,000 after withholding and refundable credits, and your withholding will cover less than 90% of your 2026 tax (or less than 100% of your 2025 tax, 110% if 2025 adjusted gross income exceeded $150,000).9Internal Revenue Service. Form 1040-ES – Estimated Tax for Individuals
Quarterly deadlines for 2026 fall on April 15, June 15, and September 15, 2026, and January 15, 2027.9Internal Revenue Service. Form 1040-ES – Estimated Tax for Individuals Win a large prize mid-year, and you should calculate expected total liability and pay by the next quarterly deadline. Waiting until April can bring underpayment penalties and interest.10Office of the Law Revision Counsel. 26 USC 6651 – Failure to File Tax Return or to Pay Tax
Offsetting With Gambling Losses
Gambling losses in the same tax year can offset winnings, but only up to the amount of your winnings, and only if you itemize deductions on Schedule A rather than taking the standard deduction. You can’t use gambling losses to reduce other income or generate a net loss.8Internal Revenue Service. Topic No. 419, Gambling Income and Losses
The IRS also wants documentation: a diary of wins and losses, backed by receipts, tickets, casino statements, or similar records. Without it, the deduction can be disallowed entirely.8Internal Revenue Service. Topic No. 419, Gambling Income and Losses
Winning as Part of a Pool
If you won as part of an office pool or group of friends, each person’s share should be reported separately. The person claiming the prize completes IRS Form 5754, which lists the name, address, taxpayer ID, and share for every group member.11Internal Revenue Service. Form 5754 The commission then issues a separate W-2G to each winner, and each person is taxed only on their own share.
Skip that form and the IRS treats the full prize as income to the person who claimed it. Distributing shares to others afterward could then look like taxable gifts. Fill out Form 5754 at the time of the claim.
Out-of-State and Non-U.S. Winners
If you live in another state and buy a winning ticket in New Hampshire, New Hampshire still withholds nothing. Your home state, though, will most likely tax the prize as part of your annual income, since states with an income tax generally require residents to report income earned anywhere. Because New Hampshire withholds nothing, there’s no New Hampshire return to file and no out-of-state credit to claim; you simply report the winnings at home. Residents of other no-income-tax states owe nothing at the state level either.
Winners who are not U.S. citizens or permanent residents face federal withholding at 30% rather than 24% on gambling winnings.12Internal Revenue Service. Publication 515 (2025), Withholding of Tax on Nonresident Aliens and Foreign Entities Tax treaties between the United States and certain countries can reduce or eliminate that withholding, so the actual rate depends on where the winner is a resident. If this applies to you, talk to a tax professional familiar with treaty provisions before claiming the prize.