New Hampshire crushes lottery winners with new 10% tax

Comment #30

Bostonmanny — Mon, 13 Jul 2009 15:40:03 GMT

That is a hell of an idea.. Taxes, penalties, fines, whatever you want to call them, have gotten out of control to make up for these states who don't know how to budget their money.. I recently got a speeding ticket (71 in a 55 zone) that was almost $300! Why not make it $1000? $5000? The taxes/penalties do not fit the winnings/crime.. This country has sure gone crazy..

Comment #29

savagegoose — Sat, 11 Jul 2009 15:33:37 GMT

we should instigate a no smoking , no drinking, no speeding, no gambling week around the world. show these dumb gubmints who and what they mess with with all these taxes, im sure they would crumble. freeking %49!!!!!!!! why the heck dont they buy their own tickets if they want HALF the dang jackpot

Comment #28

KY Floyd — Fri, 10 Jul 2009 16:36:37 GMT

As a general rule a tax paid to another state results in a credit towards the taxes you would owe in your home state. If NH didn't tax the lottery win you would simply pay income tax to CA based on your total taxable income, which would include the lottery win. If you have to pay an income tax to the state the winning ticket comes from, that payment will be credited against the tax that would otherwise be owed in your home state. The practical result is that the win is taxed at the rate of the s... [ More ]

Comment #27

Bostonmanny — Fri, 10 Jul 2009 04:08:17 GMT

NH residents also have to pay the 10% tax on out of state winnings, provided they require a 1099 form.. In short, any resident of NH is going to get screwed on any big winnings, regardless of what state they bought the ticket in.

Comment #26

bytheshore — Thu, 09 Jul 2009 23:40:47 GMT

So I'd have to pay 10% to NH + federal income tax + state income tax to CA because it would be gambling income. (thanks to KY Floyd for bringing that to my attention)

Ouch. That's a lot of taxes.

Comment #25

bytheshore — Thu, 09 Jul 2009 23:32:44 GMT

Thanks for pointing that out. My sister bought us subscriptions for Powerball when she was in Florida. We only have MM and the state lottery here.

Comment #24

Bostonmanny — Tue, 07 Jul 2009 03:49:49 GMT

I live in NH and play scratch tickets in NH and Mass.. I'm wondering if this ridiculous tax is retroactive before July 1st, when it was implemented. I just found out about the tax today.. I won $10,000 on a NH ticket and was SHOCKED to hear about this tax this morning at the lottery office.. I am an admitted compulsive gambler, and can't believe they only tax winnings and you can't claim any losses.. I have lost so much more than I have won and now they're doing this??? Hopefully it will help me... [ More ]

Comment #23

gy65 — Mon, 06 Jul 2009 03:10:05 GMT

Total taxes in Ill is 28%(including fed)

Illinois state lottery tax is 3%. Federal withholding is 25% but, depending on the amount of the jackpot, the actual tax liability could be up to 35%.

Comment #22

markp1950 — Mon, 06 Jul 2009 02:56:17 GMT

it really doesn't make sense for residents of states that don't tax their lottery winnings to buy tickets in other states.

As I Wis resident I won in Illinois. I had to pay Ill taxes but not Wis taxes. It works both ways between the 2 states.

So when I win my $82,800,000 in Illinois on Tuesday I pay Ill taxes, but not Wis taxes on that income.

Total taxes in Ill is 28%(including fed) in Ill, but 31.75% in Wis.

Pay it THEN move to South Dakota, Wyoming or Nevada....

MarkP... [ More ]

Comment #21

myturn — Sat, 04 Jul 2009 05:58:10 GMT

Maybe the residence of Granite State should also vote with their pockets, and telephones, and switch to the Massachusetts lottery games, which are available out of state by subscription

Comment #20

Kaptainess — Fri, 03 Jul 2009 13:17:41 GMT

Don't ride the bus. If people don't buy the tickets for a month - or even a few weeks they will change their tune. Trust me.

I blogged about the parking meter rates going up, they had to lower them because people stopped using the meters and parked in parking lots. ROFL!!! Justice! See? Don't ride the bus!

Same thing, if you don't make purchases they always come to their senses, unless they are completely brain dead. Ooops! Most if not all politicians are brain dead ------and I will STRES... [ More ]

Comment #19

markp1950 — Fri, 03 Jul 2009 10:36:38 GMT

Ok, I live in WI, and won $1,590 in Illinois, WI/IL agreement said that money in IL does not get taxed. So I payed about $50 Ill taxes and none to WI. I kept my losing lottery tickets so I did not have to pay and fed taxes. I probably could have gotten my $50 back, but it wasn't worth it.

When I won $10K from PB in Wisconsin I had to pay over 6% in taxes. But I reduced that by a bit by showing about $3,500 in loses.

This is where it pays to save your losing old tickets for the year.

I d... [ More ]

Comment #18

KY Floyd — Fri, 03 Jul 2009 05:53:04 GMT

Wrong. It has been very thoroughly established that income is taxable once you are entitled to the income. If you don't move until after the ticket becomes a winner (which happens at the moment the winning numbers are drawn, even if you never present it for payment), you will owe any income tax that is assessed. Should you ever find yourself in that situation you might want to consider the substantial difference between tax avoidance and tax evasion.

FWIW, I haven't seen the actual law, but I... [ More ]

Comment #17

KY Floyd — Fri, 03 Jul 2009 05:52:14 GMT

You're not quite right about the rules in California. California doesn't tax winnings from the California lottery. If a California resident wins a prize in another state's lottery the prize will be treated as any other gambling income, which is taxable. Other than playing a game that isn't available in the state of residence, it really doesn't make sense for residents of states that don't tax their lottery winnings to buy tickets in other states.

Comment #16

dpoly1 — Fri, 03 Jul 2009 03:40:30 GMT

Welcome to the Greed of Envy !!!!!

Spread the wealth around

We are no longer constituents - we are merely considered sources of income

Comment #15

JAP69 — Fri, 03 Jul 2009 00:11:07 GMT

If you are a resident at time of purchase in your home state is the question. That is where they could get you.

I use to live in N.Y. and worked in Vt. I paid Vt state tax at full rate and paid an adjusted tax rate in N.Y. as N.Y. state tax was higher.

Comment #14

SpanaUnlimited — Thu, 02 Jul 2009 23:59:59 GMT

Using your example......I think you have to pay NH tax since you bought it in NH which taxes gambling winnings. NH lottery officials by law is required to report it to NH taxation and revenue. They will withhold it regardless of whether you live there or not. The good news is you won't get charged twice since Cali doesn't charge.

Now if situation was reversed and you lived in New Hampshire and bought the ticket in California. California lottery officials will only send a 1099 to the IRS. If y... [ More ]

Comment #13

SpanaUnlimited — Thu, 02 Jul 2009 23:48:41 GMT

I realize that.....but that clarification is assuming you purchase a ticket in a different state and remain living in your original state. That is how you could get taxed twice.

However there is a way around that:

Let's say I currently live in New Hampshire. I decide to purchase a lottery ticket in Maine. Upon finding out I am a winner.....I immediately move to Maine and establish residency in the state of MAINE(driver license, housing, the whole works). Since Maine allows winners ONE... [ More ]

Comment #12

bytheshore — Thu, 02 Jul 2009 23:11:49 GMT

What if you live in a state that doesn't tax lottery prizes and buy a ticket from a state that does tax them?

I live in California (no tax). If I bought a PB ticket in NH and it won, would I have to pay the 10% tax to NH

Comment #11

maringoman — Thu, 02 Jul 2009 19:17:33 GMT

I loved making the 45 minute trip northwards to Salem NH to buy me some Hot Lotto and PB tickets but with the new taxes the trip dont make any sense.

The lame lawmakers like to play around with the tax thing because it is the only thing that American citizens pay attention to. Too bad the citizens are never too strong against them even when the taxes are crushing people to death like the case right here in Taxachussetts.

Comment #10

gy65 — Thu, 02 Jul 2009 12:54:50 GMT

For clarification . . quoting from usamega.com/powerball-faq:

If I live in a state that taxes prizes, but bought my ticket in a state with no tax on prizes, do I still need to pay state tax?

Yes, you do. Think of lottery prizes as regular earned income from a job. Just because you may work in a different state, that doesn't permit you to get away with not paying state income tax in your state of residence. The lottery works the same way.

Whether it's income from a job or income from ga... [ More ]

Comment #9

DC81 — Thu, 02 Jul 2009 08:46:17 GMT

New Hampshire doesn't have a normal state income tax (they do have a 5% tax on interest and dividends however) or sales tax, which is probably a justification for it but then why not just make it 5% to keep it in line? 10% just seems greedy but I'm sure there's rationalization that the winners are people who don't deserve it so it's okay to take more. I bet that sounds good to non-players though. Maybe Sales and Income taxes aren't allowed by their constitution because it seems to me that even a... [ More ]

Comment #8

Coin Toss — Thu, 02 Jul 2009 04:02:36 GMT

Seeing that the 'current' wave of legalized state lotteries started in New Hampshire I hope this doesn't start a wave of 10% state taxes on winnings.

Comment #7

TheGameGrl — Thu, 02 Jul 2009 03:50:24 GMT

Valid Points Todd.

Rjoh floored me with a bit of history about Ohio and its past behavior Lottery wise.

Really have a hard time grasping the fact they already take 50% of the money and retain for their own use, then decide they want 10% more....Something is soo off about that. Turn it around and simply retain 60% from the get go, making the jackpots grow slower and still attract SOME activity for the games. But to hurt those who are the contributors seems like a slap in the face....

Comment #6

SpanaUnlimited — Thu, 02 Jul 2009 03:49:14 GMT

I bet the folks in Maine or Massassusetts are happy. They only charge 5%.

If I lived in New Hampshire ain't no way I am paying 10% on top of the 35% the feds already charge. I just make the short trip across the border and avoid the NH tax. I may need to establish residency but since both Maine/Massachusetts allow 1 yr to claim the prize. It shouldn't be too difficult to estabish residency.

Comment #5

gy65 — Thu, 02 Jul 2009 03:47:55 GMT

Should the White House proposed 39.6% top federal tax bracket be approved by congress, a multi-million New Hampshire (and Montana) Powerball jackpot could potentially have over a 49% total tax obligation.

Comment #4

Todd — Thu, 02 Jul 2009 03:34:51 GMT

Actually, some people truly believe that if you raise taxes you will bring in more money to the government. As many times as that gets disproved, some people apparently want to continue believing it's true. These people would rather believe this fairy tale about raising taxes beinging in more money than to face facts that when you lower taxes on all people more money really comes in and the entire economy improves.

If New Hampshire is really hurting, they should slash taxes and open the new g... [ More ]

Comment #3

Bradly_60 — Thu, 02 Jul 2009 02:32:51 GMT

10% is totally insane. Lottery tickets are pretty much a way for the government to get more money and now they are going to tax that money again. It's double taxation which most states already do but putting 10% on that is crazy. They must really be hurting to do this.

Comment #2

pcnut — Thu, 02 Jul 2009 01:19:47 GMT

This 10% tax is almost like a double standard to the states advantage....... Hello, congratulation on you win. Here is your check, (snap photo,) now you owe us your winnings....

By the time fed and state pull there tax, pick up the crumbs and go....

What a disappointment for this state. I use to live there and love it.....

pcnut

Comment #1

RJOh — Thu, 02 Jul 2009 00:30:54 GMT

In the nineties Ohio had the best state lottery around with jackpots of $50M+ which attracted players from neighboring states when Ohio lawmakers added a rule that limited the winnings of a single lottery ticket to $20M regardless of the advertised jackpot size and people stopped playing. They got rid of that rule after a year of declining tickets sales but the lottery never recovered until after 2002 when MegaMillions was added to bring players back and stop them going out of state to play Powe... [ More ]

New Hampshire crushes lottery winners with new 10% tax

Lottery Post — Thu, 02 Jul 2009 00:11:19 GMT

Two $1M winners rush to get prizes before taxes skyrocket

Will higher taxes have the wrong effect and reduce revenue to the state?

The day before a massive 10 percent state tax on lottery prizes went into effect in the Granite State, two winners claimed separate $1 million jackpots something never before witnessed by a 20-year veteran of the lottery.

Milford High School teacher John Kasparek, 42, of Brookline, took a lump sum cash payment of $650,000 before taxes after a NH Millionaire