A Powerball jackpot bought in Kentucky is taxed at 3.5% at the state level, one of the smallest shares in the country. On today's $674,000,000 jackpot that is about $9,936,108 to Kentucky, leaving $168,963,836 from the $283,888,800 cash option.
Kentucky cut its flat income tax to 3.5% for 2026. Lottery prizes are ordinary income at that rate, and Kentucky has no local income tax.
Calculate your take-home
Kentucky Powerball payout after tax
| Line | Lump sum | Annuity (30 payments) |
|---|---|---|
| Advertised jackpot | $674,000,000 | $674,000,000 |
| Amount paid out before tax | $283,888,800 | $674,000,000 |
| Federal tax (37% bracket) | −$104,988,856 | −$247,880,007 |
| Kentucky tax (3.5%) | −$9,936,108 | −$23,590,000 |
| You keep | $168,963,836 | $402,529,992 |
| Share of the advertised jackpot | 25.1% | 59.7% |
Built from today's live cash value ($283,900,000). Single filer, standard deduction, no other income.
How Kentucky taxes lottery winnings
Kentucky uses a flat income tax, and lottery prizes are ordinary income — not capital gains, not a special category. Because a jackpot is far above the highest bracket threshold, the effective state rate on the prize is the top rate, 3.5%.
- Kentucky has been stepping its flat rate down in half-point moves when revenue targets are met.
- The Kentucky Lottery withholds state tax on prizes over $5,000.
Three prizes, worked out for Kentucky
| Prize | Cash value | Federal | Kentucky | You keep |
|---|---|---|---|---|
| $1M | $421,200 | −$110,554 | −$14,742 | $295,904 |
| $10M | $4,212,000 | −$1,508,440 | −$147,420 | $2,556,140 |
| Current jackpot ($674M) | $283,888,800 | −$104,988,856 | −$9,936,108 | $168,963,836 |
Smaller prizes are worth checking against your own bracket: below roughly $640,600 of taxable income the federal rate is 35% or less, so the flat 37% used here overstates the bill on smaller wins.
If you live in Kentucky but buy elsewhere
Lottery income is generally taxed by the state where the ticket was purchased, and again by your state of residence, with a credit for tax paid to the first state. That credit is usually capped at the home state's own rate, so a higher-tax home state still collects the difference.
That matters in Kentucky because Tennessee is next door with no tax on a home-state ticket. Crossing the border to buy does not make the prize tax-free for a Kentucky resident — it just adds a second state to the paperwork.
Residency is decided by facts — where you spend the year, where you vote, where your home is — not by the address you write on the claim form. Moving after the win does not retroactively change the state that taxes the prize.
Compare Kentucky with its neighbours
| State | Rate on a jackpot | Take-home (lump sum) | Difference |
|---|---|---|---|
| Kentucky | 3.5% | $168,963,836 | — |
| Ohio | 2.75% | $171,093,002 | +$2,129,166 |
| Indiana | 2.95% | $170,525,224 | +$1,561,388 |
| Tennessee | 0% | $178,899,944 | +$9,936,108 |
All 46 jurisdictions are listed in the state tax index and the full rate table.
Frequently asked
Does Kentucky tax Powerball winnings?
Yes. Kentucky treats a Powerball jackpot as ordinary income and taxes it at 3.5% at the top marginal rate. On the current $674M jackpot that is about $9,936,108 on a lump-sum claim.
How much would I keep from the current jackpot in Kentucky?
About $168,963,836 on the cash option ($283,888,800), or about $402,529,992 if you take the 30-payment annuity and stay in Kentucky for all of it. Both figures are before any local tax, professional fees or other income.
Do I pay Kentucky tax if I buy the ticket in another state?
Usually yes. Kentucky taxes residents on worldwide income, so a prize won in a no-tax state such as Tennessee is still Kentucky income. You would generally claim a credit for tax withheld by the state where you bought the ticket, but the credit rarely covers the full 3.5%.
Can I claim anonymously in Kentucky?
Anonymity rules are set by the state lottery, not the tax code, and they change. Some states let a trust or LLC claim in place of the individual; others publish the winner's name regardless. Check the Kentucky lottery claim rules before you sign the back of the ticket.