Lottery winnings tax in South Dakota
Nothing. South Dakota has no personal income tax. Federal tax still applies.
Updated · 2026 tax rules · How we calculate
You keep
$39,650
Cash at payout
$38,000
Total tax
$10,350
Over-withheld
$1,650
- Form W-2G
- Yes
- Federal withholding at payout
- $12,000
- Federal tax on the winnings
- $10,350
- State tax
- $0
- Over-withheld
- $1,650
- You keep
- $39,650
$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.
The payer holds back 24% of winnings over $5,000 and sends it to the IRS. It's a prepayment, not the final tax.
Winnings are ordinary income stacked on your other $60,000. Your top dollar lands in the 22% bracket.
South Dakota has no personal income tax.
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.
$50,000 minus $10,350 in federal and state tax: an effective rate of 20.7%.
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
- South Dakota tax
- Nothing. South Dakota has no personal income tax. Federal tax still applies.[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]
- Where to play
- South Dakota runs a state lottery.[5]
What you keep at different amounts
For a single filer with $60,000 of other income and no gambling losses, living and winning in South Dakota.
| Won | W-2G | Withheld | Federal tax | State tax | You keep |
|---|---|---|---|---|---|
| $1,500 | No | $0 | $180 | $0 | $1,320 |
| $2,000 | Yes | $0 | $240 | $0 | $1,760 |
| $10,000 | Yes | $2,400 | $1,550 | $0 | $8,450 |
| $50,000 | Yes | $12,000 | $10,350 | $0 | $39,650 |
| $100,000 | Yes | $24,000 | $22,114 | $0 | $77,886 |
Assumes a $2 ticket price, so the 300x test is met at every amount shown.
Questions
- How much is South Dakota tax on lottery winnings?
- Nothing. South Dakota has no personal income tax. Federal tax still applies.[1]
More for South Dakota
All of South Dakota's gambling tax rules · Lottery in every state
Sources
- [1] Tax Foundation, State Individual Income Tax Rates and Brackets, 2026 · checked September 22, 2026
- [2] IRS, Instructions for Forms W-2G and 5754 (01/2026) · checked September 22, 2026
- [3] Federal Register, REG-113229-25 proposed rule (Apr. 17, 2026) · checked September 22, 2026
- [4] 26 U.S. Code § 3402 (withholding) · checked September 22, 2026
- [5] American Gaming Association, South Dakota Gaming Regulatory Fact Sheet (2025) · checked September 22, 2026