California Lottery Payout Options
California lottery players who have won a prize from one of the many draw or scratch-off games have a few lottery payout options available to them. Depending on the amount you have won and your personal preferences, winners can receive either a cash payout for lotto wins or a series of lotto payments over a set number of years. Additional options are available for individual lottery payout amounts when players have participated in a lottery game as a group. Prior to receiving your lotto cash payout though, winners should know the regulations regarding federal taxes withheld from your lottery net payouts. Winners also have the option of assigning their prize to a third party. California lottery players wondering “how does the lottery pay out work?” should read the sections outlined below to find out more:
- Lottery payout rules
- Group lottery payments
- Lottery payout taxes
- Third party lottery assignments
How does lottery payout work in California?
The California Lottery Commission provides lottery prize payouts to winning players based on the winner’s preferences and the amount of their prize. Large winning jackpot prizes – typical of draw games as is the case with Mega Millions, SuperLotto Plus and Powerball lottery payout – fall to the default option of 30 payout installments that graduate in amount based on a lottery payout table. However, Mega Millions, SuperLotto Plus and Powerball winners can choose to receive their prizes in one lump cash sum based on the cash value of the jackpot at the time of their win. For example, winners asking “what is the cash lotto payout for Powerball?” will receive their prizes based on the estimated Powerball payout cash value for the jackpot at the time of their win. Requests for lotto cash payouts must be made within 60 days of your initial lotto prize claim approval.
California offers a few scratch-off games with large lotto cash payouts as well. In the case of these scratch-off cards, winners also have the option of annuitized payments or one lump cash sum. Choosing the cash option awards winners the prize value based on the lottery payout calculator. To choose the cash lotto payout option for scratch-off games, complete a Jackpot Election Payment Form and submit it to a California Lottery Commission district office.
Lottery prizes awarded in annuity payments will have a total value higher than lump sum lotto cash payouts due to the estimated investment value of the jackpot over 30 years.
Does the California Lottery pay individuals who are part of a group win?
The California Lottery Commission allows winners of a group pool in certain lottery games to receive individual payments for their portion of the total lotto cash payout. Games and prize amounts eligible for individual payments for group players include Fantasy 5, Daily 3, Daily 4, Hot Spot, Daily Derby, SuperLotto Plus, Mega Millions and Powerball for prizes totaling one million dollars or more. Individual payments are made to groups of 100 or less only. Group winners can claim individual lotto payments by completing a Lottery Multiple Ownership Claim Form at a California Lottery Commission district office. Group lotto winners must all choose the same lottery payout option.
How much will I pay in CA lottery taxes?
Though California does not withhold state taxes from lottery cash payouts, the lottery commission is required to withhold federal taxes depending on the amount of your prize. Tax amounts vary depending on your residential status in the United States. For example, U.S. citizens and resident aliens with a valid Social Security Number will have a federal tax withholding totaling 25% of their winnings. U.S. citizens and resident aliens without a valid Social Security Number will have 28% of their winnings withheld for taxes. Lottery winners who are not U.S. citizens or resident aliens will have 30% of their winnings withheld for federal taxes. Additional taxes may be required based on the winner’s financial situation prior to receiving their lottery payments.
For national lottery games such as Mega Millions and Powerball, lottery payouts by state may change due to varying state taxes.
Can I assign my California lottery prize payouts to a third party?
The California lottery commission allows winners of California lottery games to assign their prizes to a third party provided they follow the proper assignment procedures. Lottery winners can also assign their lottery net payouts as collateral for loan applications as well. To initiate the assignment process, contact the California Lottery Commissions Prize Payments Annuity Desk.