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WinningsTax

Lottery winnings tax in North Carolina

North Carolina taxes lottery winnings as ordinary income at a flat 3.99%.

Updated · 2026 tax rules · How we calculate

$
$
$
$
More options
$

You keep

$37,655

Cash at payout

$36,005

Total tax

$12,345

Over-withheld

$1,650

Form W-2G
Yes

$50,000 is at or above the $2,000 reporting threshold, so the payer files a W-2G with the IRS and gives you a copy.

Federal withholding at payout
$12,000

The payer holds back 24% of winnings over $5,000 and sends it to the IRS. It's a prepayment, not the final tax.

Federal tax on the winnings
$10,350

Winnings are ordinary income stacked on your other $60,000. Your top dollar lands in the 22% bracket.

State tax
$1,995

North Carolina taxes gambling winnings as ordinary income.

North Carolina withholding at payout
$1,995

North Carolina requires the payer to hold back 3.99% for state tax.

Over-withheld
$1,650

More was withheld than these winnings add to your tax. The difference reduces what you owe on the rest of your return, or comes back as a refund.

You keep
$37,655

$50,000 minus $12,345 in federal and state tax: an effective rate of 24.7%.

An estimate for 2026, not tax advice. It treats this win as your only gambling income for the year and leaves out local income taxes. Nothing you enter leaves your browser.

The rules

North Carolina tax
North Carolina taxes lottery winnings as ordinary income at a flat 3.99%.[1]
Federal tax form
Lottery prizes of $2,000 or more that are at least 300 times the ticket price are reported on a W-2G. The threshold was $600 before 2026.[2]
Federal withholding
24% is withheld from lottery prizes of more than $5,000 (minus the ticket price). No 300x test applies to lotteries.[4]
North Carolina withholding
North Carolina withholds 3.99% on lottery winnings of $600 or more.[5]
Gambling losses
A 2026 law (S.L. 2026-41) created a North Carolina itemized deduction for gambling losses, from tax year 2025, capped at the amount federal law allows, so the 90% limit should apply.[7]Unverified
Visitors
North Carolina taxes nonresidents on lottery winnings won there, so visitors may need to file a nonresident return.[8]
Where to play
North Carolina runs a state lottery.[9]

What you keep at different amounts

For a single filer with $60,000 of other income and no gambling losses, living and winning in North Carolina.

WonW-2GWithheldFederal taxState taxYou keep
$1,500No$60$180$60$1,260
$2,000Yes$80$240$80$1,680
$10,000Yes$2,799$1,550$399$8,051
$50,000Yes$13,995$10,350$1,995$37,655
$100,000Yes$27,990$22,114$3,990$73,896

Assumes a $2 ticket price, so the 300x test is met at every amount shown.

Questions

How much is North Carolina tax on lottery winnings?
North Carolina taxes lottery winnings as ordinary income at a flat 3.99%.[1]
Does North Carolina withhold tax from lottery winnings?
North Carolina withholds 3.99% on lottery winnings of $600 or more.[5]
Do visitors pay North Carolina tax on lottery winnings?
North Carolina taxes nonresidents on lottery winnings won there, so visitors may need to file a nonresident return.[8]

More for North Carolina

All of North Carolina's gambling tax rules · Lottery in every state

Sources

  1. [1] Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 · checked September 22, 2026
  2. [2] IRS, Instructions for Forms W-2G and 5754 (01/2026) · checked September 22, 2026
  3. [3] Federal Register, REG-113229-25 proposed rule (Apr. 17, 2026) · checked September 22, 2026
  4. [4] 26 U.S. Code § 3402 (withholding) · checked September 22, 2026
  5. [5] N.C.G.S. 105-163.2B; NCDOR sports wagering FAQ Q11 · checked September 22, 2026
  6. [6] NCDOR FAQ on Sports Wagering Excise Tax and Winnings/Losses (Apr 2024) · checked September 22, 2026
  7. [7] NCDOR Important Notice: Impact of Recently Enacted Laws (July 2026) · checked September 22, 2026
  8. [8] N.C.G.S. 105-153.4 · checked September 22, 2026
  9. [9] Fox Sports, Where is sports betting legal? · checked September 22, 2026