A Powerball jackpot bought in Minnesota is taxed at 9.85% at the state level, among the highest in the country. On today's $674,000,000 jackpot that is about $27,963,047 to Minnesota, leaving $150,936,897 from the $283,888,800 cash option.
Minnesota has the highest top income tax rate in the Midwest at 9.85%, and lottery prizes are ordinary income. There is no local income tax.
Calculate your take-home
Minnesota 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 |
| Minnesota tax (9.85%) | −$27,963,047 | −$66,389,000 |
| You keep | $150,936,897 | $359,730,992 |
| Share of the advertised jackpot | 22.4% | 53.4% |
Built from today's live cash value ($283,900,000). Single filer, standard deduction, no other income.
How Minnesota taxes lottery winnings
Minnesota uses a graduated 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, 9.85%.
- Minnesota also has a 1% surtax on certain investment income above $1 million, but lottery prizes are not investment income.
- The state withholds 7.25% at payout against a 9.85% liability, one of the largest withholding gaps in the country.
Three prizes, worked out for Minnesota
| Prize | Cash value | Federal | Minnesota | You keep |
|---|---|---|---|---|
| $1M | $421,200 | −$110,554 | −$41,488 | $269,158 |
| $10M | $4,212,000 | −$1,508,440 | −$414,882 | $2,288,678 |
| Current jackpot ($674M) | $283,888,800 | −$104,988,856 | −$27,963,047 | $150,936,897 |
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 Minnesota 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.
Minnesota is surrounded by states with similar rates (Iowa 3.8%, Wisconsin 7.65%, North Dakota 2.5%), so where you buy changes the withholding and the filing, but rarely the total by much.
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 Minnesota with its neighbours
| State | Rate on a jackpot | Take-home (lump sum) | Difference |
|---|---|---|---|
| Minnesota | 9.85% | $150,936,897 | — |
| Iowa | 3.8% | $168,112,169 | +$17,175,272 |
| Wisconsin | 7.65% | $157,182,451 | +$6,245,554 |
| North Dakota | 2.5% | $171,802,724 | +$20,865,827 |
All 46 jurisdictions are listed in the state tax index and the full rate table.
Frequently asked
Does Minnesota tax Powerball winnings?
Yes. Minnesota treats a Powerball jackpot as ordinary income and taxes it at 9.85% at the top marginal rate. On the current $674M jackpot that is about $27,963,047 on a lump-sum claim.
How much would I keep from the current jackpot in Minnesota?
About $150,936,897 on the cash option ($283,888,800), or about $359,730,992 if you take the 30-payment annuity and stay in Minnesota for all of it. Both figures are before any local tax, professional fees or other income.
Do I pay Minnesota tax if I buy the ticket in another state?
It depends on residency. Minnesota taxes its residents on income wherever it arises, and the state where you bought the ticket may withhold too. You would normally claim a credit in Minnesota for tax paid to the other state. The state of purchase is not automatically the only one that taxes you.
Can I claim anonymously in Minnesota?
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 Minnesota lottery claim rules before you sign the back of the ticket.