Tax Overhaul Brings Small Change In Withholding Rate For Some Lottery Prizes
The federal tax overhaul that took impact this month features a small exchange for lottery winners who declare prizes of greater than $five,000. The federal withholding charge that applies to these prizes has lowered just a little.
For years, the federal withholding charge that carried out to lottery prizes of greater than $five,000 used to be 25 %. Under the brand new tax charges that took impact this month, that charge has been reduced to 24 %. The state withholding charge stays unchanged at five % for all Iowa Lottery prizes of greater than $600.
So in the event you win a large lottery prize, a bit bit much less in withholdings will likely be deducted out of your winnings.
We applied the withholding exchange right here on the Iowa Lottery on Monday (Jan. 29). So in the event you claimed a prize of greater than $five,000 that day or declare one sooner or later, the brand new charge will now observe.