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Notice - New Jersey State Lottery Withholding Rates

New Jersey State Lottery prizes are taxable for New Jersey Gross Income Tax purposes under N.J.S.A. 54A:6-11 if the prize exceeds $10,000. Taxable lottery winnings are subject to withholding at the rate determined by the Director of the Division of Taxation. N.J.S.A. 54A:7-1c. The taxability of the winnings is determined by the amount of the prize, but the rate of withholdings is determined by the amount of the payout. Once it is determined that a prize is taxable, i.e. over $10,000, the entire amount of the payout is subject to withholding, not just the amount in excess of $10,000.

Effective for lottery payouts made on and after July 1, 2016, the withholding rates for gambling winnings paid by the New Jersey State Lottery are as follows:

  • 5% for lottery payouts in excess of $10,000 and up to $500,000;
  • 8% for lottery payouts in excess of $500,000;
  • 8% for lottery payouts in excess of $10,000, if the claimant does not provide a valid taxpayer identification number.
Should you have any questions regarding the above, you may contact the Division's Customer Service Center at 609-292-6400 e-mail us.

Last Updated: Tuesday, 08/02/16

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