A Powerball jackpot bought in North Dakota is taxed at 2.5% at the state level, one of the smallest shares in the country. On today's $674,000,000 jackpot that is about $7,097,220 to North Dakota, leaving $171,802,724 from the $283,888,800 cash option.
North Dakota has the lowest top income tax rate of any Powerball state at 2.5%, and lottery prizes are taxed at that rate. No local income tax applies.
Calculate your take-home
North Dakota 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 |
| North Dakota tax (2.5%) | −$7,097,220 | −$16,850,000 |
| You keep | $171,802,724 | $409,269,992 |
| Share of the advertised jackpot | 25.5% | 60.7% |
Built from today's live cash value ($283,900,000). Single filer, standard deduction, no other income.
How North Dakota taxes lottery winnings
North Dakota 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, 2.5%.
- North Dakota withholds 2.9% at payout, slightly above the 2.5% top rate.
- North Dakota has considered repealing its income tax; the idea has surfaced repeatedly in the legislature without becoming law.
Three prizes, worked out for North Dakota
| Prize | Cash value | Federal | North Dakota | You keep |
|---|---|---|---|---|
| $1M | $421,200 | −$110,554 | −$10,530 | $300,116 |
| $10M | $4,212,000 | −$1,508,440 | −$105,300 | $2,598,260 |
| Current jackpot ($674M) | $283,888,800 | −$104,988,856 | −$7,097,220 | $171,802,724 |
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 North Dakota 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 North Dakota because South Dakota 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 North Dakota 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 North Dakota with its neighbours
| State | Rate on a jackpot | Take-home (lump sum) | Difference |
|---|---|---|---|
| North Dakota | 2.5% | $171,802,724 | — |
| South Dakota | 0% | $178,899,944 | +$7,097,220 |
| Minnesota | 9.85% | $150,936,897 | −$20,865,827 |
| Montana | 5.65% | $162,860,227 | −$8,942,497 |
All 46 jurisdictions are listed in the state tax index and the full rate table.
Frequently asked
Does North Dakota tax Powerball winnings?
Yes. North Dakota treats a Powerball jackpot as ordinary income and taxes it at 2.5% at the top marginal rate. On the current $674M jackpot that is about $7,097,220 on a lump-sum claim.
How much would I keep from the current jackpot in North Dakota?
About $171,802,724 on the cash option ($283,888,800), or about $409,269,992 if you take the 30-payment annuity and stay in North Dakota for all of it. Both figures are before any local tax, professional fees or other income.
Do I pay North Dakota tax if I buy the ticket in another state?
Usually yes. North Dakota taxes residents on worldwide income, so a prize won in a no-tax state such as South Dakota is still North Dakota 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 2.5%.
Can I claim anonymously in North Dakota?
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 North Dakota lottery claim rules before you sign the back of the ticket.