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Pick 4 lottery player wins $500,000

Topic closed. 32 replies. Last post 11 years ago by libra926.

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four4me's avatar - gate1
MD
United States
Member #1701
June 18, 2003
8363 Posts
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Posted: April 21, 2006, 2:25 am - IP Logged

Maryland tax rules.

For prize payments over $5,000 taxes will be withheld as follows:
25.0% Federal Tax
7.5% State tax (Maryland residents)
5.0% State Tax (non-Maryland residents)

For information on Lottery prizes and your Maryland tax obligations visit: http://taxpros.marylandtaxes.com 
For information on Lottery prizes and Federal tax obligations visit:  http://www.irs.gov/

    four4me's avatar - gate1
    MD
    United States
    Member #1701
    June 18, 2003
    8363 Posts
    Offline
    Posted: April 21, 2006, 2:28 am - IP Logged

    i won two 50 cent pick 4 straights in my state for 2,500 each.my tax advisor told me when i got my return that this was added to my total gross income and that due to me winning these it caused me to get a smaller return.instead of getting 6,000 back this year i got 4,000 back.all for winning the lottery in pick 4.was it worth it?,lol........

    Mike if you itemized deductions your tax man should have told you you could collect some of your lottery tax money back buy producing x amount of losing lottery tickets. I know you can do that in Maryland.

      Avatar
      Bethesda, Maryland
      United States
      Member #16901
      June 6, 2005
      446 Posts
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      Posted: April 21, 2006, 4:34 pm - IP Logged

      It looks like he played $5.00 on each ticket and won $25,000.00 for each one, nice call.

       

      Should have asked for 100 $1 tickets. Then maybe there would not have been any withholdings.

      If it's similar to WI, a P4 straight for $1 gets you $5,000. And anything in the way of a prize that excedes $599 requires you to go to the Lottery Office to collect; no retailer will cash it.  Therefore, even one straight P4 ticket cannot escape having taxes deducted from it.

      A win of exactly $5000 is NOT subject to federal withholding. A few states do withhold at $600.

      We've had this discussion before, but for you "newbies", I'll reiterate:

      Winnings of $600-$5000 ARE NOT subject to withholding when you go to claim your prize, however, some states still do it. If you win $5000 on a single ticket, you should be asked whether or not you want taxes taken out, as you have that option. The same applies for anything over $600. They should ask you whether or not you want taxes taken out - they SHOULD NOT do it automatically. If you have 20 tickets at $5/piece winning $25,000 each, then since all plays on that ticket are combined into a "single play", the ENTIRE PRIZE on that ticket IS SUBJECT TO WITHHOLDING at a mandatory 25% level (in this case, ALL 20 TICKETS are subject to withholding). I'm not sure though if the states that impose taxes on winnings take out state taxes. I don't see why they wouldn't.

       

      Hope this clears the air.

       Kris

       

      HAPPY FRIDAY.....TO ALL THE LP MEMBERS...4/21/2006

      I must say, I've enjoyed reading all the postings regarding the issue on tax withdrawals from the Prize winnings because I didn't know how the processed worked, and it's certainly important to me, as well. Most of you are Mathmatically Savvy and Tax Savvy. I'm taking notes.

      Wink