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So you have the winning ticket, now what?

Topic closed. 23 replies. Last post 10 years ago by AuntiePat.

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MissNYC's avatar - diva
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Westchester, New York
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Posted: August 6, 2007, 5:10 pm - IP Logged

I've always wondered, let's say you walk into lotto headquarters with a winning ticket, what exactly happens? I'm assuming you fill out a bunch of paperwork, but then what, do they just cut you a check? Do they allocate it into different accounts for you if you wish?

 And what if you are from NY, but play Megamillions in Jersey....do you pay NJ lottery taxes (which is nothing) or NY lottery taxes. And what if you want to give a smaller lump sum to someone...is that done before or after taxes, and is that money taxed once it is given to the person again?

"If you just keep believing, that dream that you wish will come true"

Bed

 


    United States
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    June 22, 2005
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    Posted: August 6, 2007, 5:36 pm - IP Logged

    I think it takes about 2 weeks to get the check after the paperwork.

    Once you get paid, after taxes, I think you can give whatever amount as a gift to a relative, and it wouldn't be taxed, but I'm not sure....maybe there's a gift tax.

    TAX TAX TAX TAX TAX!!!!!!

    Somebody once told me that solar power is really much cheaper than we've been told. It's not expensive because of manufacturing costs , but because the government is making it expensive until they figure out how they can tax sunlight...lol

      Avatar
      Kentucky
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      February 14, 2006
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      Posted: August 6, 2007, 5:53 pm - IP Logged

      I've always wondered, let's say you walk into lotto headquarters with a winning ticket, what exactly happens? I'm assuming you fill out a bunch of paperwork, but then what, do they just cut you a check? Do they allocate it into different accounts for you if you wish?

       And what if you are from NY, but play Megamillions in Jersey....do you pay NJ lottery taxes (which is nothing) or NY lottery taxes. And what if you want to give a smaller lump sum to someone...is that done before or after taxes, and is that money taxed once it is given to the person again?

      "And what if you are from NY, but play Megamillions in Jersey....do you pay NJ lottery taxes (which is nothing) or NY lottery taxes."

      That's a good question because it's possible you could be taxed in both states if both they had state income taxes.

      "And what if you want to give a smaller lump sum to someone...is that done before or after taxes, and is that money taxed once it is given to the person again?"

      That depends on state lottery codes; in Ohio a group of people can equally split a jackpot but I don't know if one winner could keep half and portion out the rest.

      People are always talking about getting lawyers and financial planners before cashing their tickets and maybe the best advice is contacting the state lottery commission. 

        stavros's avatar - avatar 6898.gif
        Florida
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        Posted: August 6, 2007, 5:58 pm - IP Logged

        "And what if you are from NY, but play Megamillions in Jersey....do you pay NJ lottery taxes (which is nothing) or NY lottery taxes."

        That's a good question because it's possible you could be taxed in both states if both they had state income taxes.

        "And what if you want to give a smaller lump sum to someone...is that done before or after taxes, and is that money taxed once it is given to the person again?"

        That depends on state lottery codes; in Ohio a group of people can equally split a jackpot but I don't know if one winner could keep half and portion out the rest.

        People are always talking about getting lawyers and financial planners before cashing their tickets and maybe the best advice is contacting the state lottery commission. 

        I Agree!

        Good Luck!

        Stavros

         

          AuntiePat's avatar - animaniacs10
          Just outside of Cleveland, OH
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          Posted: August 6, 2007, 6:24 pm - IP Logged

          The irony, I suppose, is that each dollar put into the Jackpot already represented an after tax dollar of income for whomever purchased that ticket.  But the only way they could get the states to buy into the multistate lotteries was to give 'em money on the frontend and the back--they share in the lotteries' revenues and they get to tax the winners--although I'm thinking that one or two states do not tax lottery winnings, or is it just winnings on the big banana? 

          As I've stated somewhere else--the Feds receive at least 35% on lottery winnings and the funds that are distributed only--at least for the Mega Millions--only withhold 25% for the Feds and then whatever your state income tax amounts to.  In OH, funds are distributed for 69% (withholding 25% Fed, 6% OH) of the cash value despite the fact that the actual amount that should be distributed ought to be be about 58% (Fed = 35%, OH= 7.1%).  Lovely thought to have your extended family thinking you're winning an $89M JP when the truth is actually closer to $30M--which, of course, is a life changing amount of money in anyone's book.  But it's all in perception--don't you perceive someone who is supposed to have won almonst $90M as wealthier than someone who has actually won $29980M? 

          LOL--at this point--anything over $100,000 would be a life changing event for me--I just wouldn't be able to help financially elevate the people I love.

          Thank God for Lottery Post where we can give vent to some of our dreams and frustrations (even if they are the same old polls recycled--h3ll--life's just recycled and I don't notice many signing up for the alternative)!!

          See Ya!

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            Coastal Georgia
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            Posted: August 6, 2007, 6:35 pm - IP Logged

            So you have the winning ticket, now what ?

            Banana  I will party until I Thud

             

                                           

                          

             

             

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              Grand Rapids, Michigan
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              Posted: August 6, 2007, 7:02 pm - IP Logged

              I'd  be in shock wondering how the heck did I win???  Also I'd love to see my bank account will all those zeroes...not to mention that stupidly big funny looking check.

                MissNYC's avatar - diva
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                Westchester, New York
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                Posted: August 7, 2007, 10:05 am - IP Logged

                The irony, I suppose, is that each dollar put into the Jackpot already represented an after tax dollar of income for whomever purchased that ticket.  But the only way they could get the states to buy into the multistate lotteries was to give 'em money on the frontend and the back--they share in the lotteries' revenues and they get to tax the winners--although I'm thinking that one or two states do not tax lottery winnings, or is it just winnings on the big banana? 

                As I've stated somewhere else--the Feds receive at least 35% on lottery winnings and the funds that are distributed only--at least for the Mega Millions--only withhold 25% for the Feds and then whatever your state income tax amounts to.  In OH, funds are distributed for 69% (withholding 25% Fed, 6% OH) of the cash value despite the fact that the actual amount that should be distributed ought to be be about 58% (Fed = 35%, OH= 7.1%).  Lovely thought to have your extended family thinking you're winning an $89M JP when the truth is actually closer to $30M--which, of course, is a life changing amount of money in anyone's book.  But it's all in perception--don't you perceive someone who is supposed to have won almonst $90M as wealthier than someone who has actually won $29980M? 

                LOL--at this point--anything over $100,000 would be a life changing event for me--I just wouldn't be able to help financially elevate the people I love.

                Thank God for Lottery Post where we can give vent to some of our dreams and frustrations (even if they are the same old polls recycled--h3ll--life's just recycled and I don't notice many signing up for the alternative)!!

                See Ya!

                And I think Powerball collects more of the jackpot because it always seems like you take home more money with the megamillions. I'm not sure why though.

                "If you just keep believing, that dream that you wish will come true"

                Bed

                 

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                  Indiana
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                  December 29, 2005
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                  Posted: August 7, 2007, 11:59 am - IP Logged

                  First the disclaimer...I'm not an attorney.  You would be well advised to consult one instead of taking what I have to say as gospel.

                  Second...I live in Indiana so the information I present is relevant to citizens of Indiana and out of state residents who win money on the Hoosier Lottery.  It may or may not be applicable to your state.

                  Here's what my research has uncovered:

                  1. When you go to Lottery Headquarters with your winning ticket to claim your prize there will be a validation process which includes (1) validating the actual ticket to make sure it's not a forgery.  (2) A security procedure which includes a questionaire that among other things asks you relevant questions such as where did you buy the ticket...when did you buy the ticket...how many tickets did you buy etc.  (3) An IRS tax form will be provided and you must fill it out.  If you are an individual you must provide your Social Security number...if you claim as a corporation you must provide an EIN number and I'm not sure what you have to provide as a trust.  (4) A search of state records will be done to see if you have any outstanding obligations such as Tax Liens...child support and as far as I can tell even civil judgments.  (Although the language in the IC codes isn't clear to me I think civil judgments do apply.)  (5) I have also been told that they do a criminal background check to see if you have any outstaning warrants.  This is not in the IC codes so I have no idea if this is truth or urban legend. 

                  Also in Indiana regardless of how you claim your prize...Trust...LLC or whatever...you must provide the Lottery with the name and social security number of the actual person who is claiming the prize.  This is so they can make sure they deduct any outstanding obligations.

                  NOTE: In Indiana there is a disclaimer that you MUST meet with the Hoosier Lottery Public Relations people and participate in interviews with them and the media.  You must also grant them permission to use your name, image and any comments.  I'm not sure how this applies to a Trust but the disclaimer on the tickets say you must do this and the IC Codes state the Executive Director has complete and sole discretionary authority to release your name and image.

                  In addition the Executive director of the Hoosier Lottery has the power to withhold a prize if there is a question about the winner's true identity! 

                  NOTE: There have been 2 people in Indiana that have claimed lottery jackpots as Revocable Living Trusts and the Hoosier Lottery has not released the identity or any personal information on the winners that I am aware of. 

                  2. If you win a large prize other than the jackpot (such as a 5 number Powerball prize) then after all of this is completed they issue you a check on the spot.

                  If you win the jackpot and elect to take the annuity then after all the security procedures are completed you get a check for the first annuity payment on the spot. 

                  If you will the jackpot and elect to take the cash value then you receive a wire transfer after all the prize money is collected from all other states.  In other words they do not give you a check and the information I have suggests they do not wire the money into different accounts.  One wire transfer to one financial institution.  It's up to you to disprse it.

                  NOTE: I found some information on the Powerball website that says it takes 2 weeks to collect the jackpot prize money from all the states.  The information suggests that they began collecting the prize money as soon as they know there's a winner.  If you elect to take the cash option and you wait 2 weeks to collect your prize the information says you will receive your jackpot prize 24 hours after claiming it.  i.e. The next (business?) day.

                  3. By law the Hoosier Lottery is required to withhold 25% for Federal Income tax.  The previous posters are correct in that your ultimate Federal tax liability will be 35%.  Regardless of your personal tax status the Federal tax liability on that much money is 35%.   My research indicates that no matter how you claim your prize (trust, LLC etc. there are very few ways to get around this.  You would be well advised to consult a CPA who is also a tax attorney for precise information.  But I can't really see a way around this.  By the way...for those of you wo think you can reduce the tax burden by ginving money to charity I feel compelled to remind that whether you give it away or pat it to the Federal Government...it's still gone!)

                  By law the Hoosier Lottery is also required to withhold 3.4% Indiana Income Tax and also any applicable county or municipal taxes.  EVEN if you are an out of state resident they will withhold the Indiana State Income Tax and maybe the county or municipal tax where you purchased the ticket as well.  Language on the Hoosier Lottery website says you may be eligable for a refund of that money if you are an out of state resident.

                  4. In Indiana it appears they will pay multiple winners.  So if 2 people want to split the jackpot I believe they can.  This is the best for each person with regard to tax liability.  Otherwise I would be very careful about giving money to relatives.  The Federal Government has Gift Tax statues and the tax liability is stiff for money given away.  I forgot the current limit but you can only give away something like $10,000 per receipient in you lifetime before you incure a huge tax liability...something like 50% or more.  (Sorry I don't have the actual information at my fingertips as it's been a while since I looked it up.  But you can find it easily enough by doing a search or going to the IRS website.)

                  I hope this helps.

                  Jim 


                  Money frees you from doing things you dislike.  Since I dislike doing nearly everything, money is handy.  - Groucho Marx

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                    NY
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                    Posted: August 7, 2007, 4:03 pm - IP Logged

                    And I think Powerball collects more of the jackpot because it always seems like you take home more money with the megamillions. I'm not sure why though.

                    Lotteries don't collect jackpots, they pay them. If you go back to your other post about it you'll see that your question has been answered. 

                    Uncle Jim did a really good job of explaining most of the typical process. 

                    You can currently  give up to $12,000 *per year* to each recipient without triggering the gift tax, with some cumulative lifetime limit. I believe that limit is still $1 million, though the estate tax exemption has been bumped up. Some gifts aren't subject to the exemption limit, such as charitable gifts, gifts to a spouse (anyone else see a huge loophole here?), and payment of tuition and medical expenses.

                     If you win a lottery in a  state in which you don't live you can expect to pay income tax to that state at their standard rate.  In NJ and PA income from their state lottery games is exempt, so you wouldn't owe them anything if you won with aMM or PB ticket purchased there. It's possible that you'd still have to file a tax return, but if so the exemption would offset the income.  If you  won in a state that  does tax winnings in their own lottery, such as CT, you would  have to file a  return and pay the tax.  The winnings would also increase your taxable income in your state of residence, but taxes paid to another state are credited against the obligation in your state of residence.  CT's rate is lower than NY's, so you'd pay some to CT and the balance to NY. VT's rate is higher than NY's so  if you won PB with a VT ticket you'd pay more to VT than you would have owed on the same income in NY.

                     As far as splitting a jackpot  there are two considerations. The first is the rules of the lottery. Some will write multpiple checks and others will  write one check and leave it to you to split the proceeds. The second consideration is the tax consequences. If somebody owns a share of the ticket they will pay their own income taxes on their share of the proceeds.  If you  choose to give some of your winnings as a gift then the gift tax rules will apply.

                      tnlotto1's avatar - logo
                      nashville
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                      February 18, 2007
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                      Posted: August 7, 2007, 4:57 pm - IP Logged

                      First the disclaimer...I'm not an attorney.  You would be well advised to consult one instead of taking what I have to say as gospel.

                      Second...I live in Indiana so the information I present is relevant to citizens of Indiana and out of state residents who win money on the Hoosier Lottery.  It may or may not be applicable to your state.

                      Here's what my research has uncovered:

                      1. When you go to Lottery Headquarters with your winning ticket to claim your prize there will be a validation process which includes (1) validating the actual ticket to make sure it's not a forgery.  (2) A security procedure which includes a questionaire that among other things asks you relevant questions such as where did you buy the ticket...when did you buy the ticket...how many tickets did you buy etc.  (3) An IRS tax form will be provided and you must fill it out.  If you are an individual you must provide your Social Security number...if you claim as a corporation you must provide an EIN number and I'm not sure what you have to provide as a trust.  (4) A search of state records will be done to see if you have any outstanding obligations such as Tax Liens...child support and as far as I can tell even civil judgments.  (Although the language in the IC codes isn't clear to me I think civil judgments do apply.)  (5) I have also been told that they do a criminal background check to see if you have any outstaning warrants.  This is not in the IC codes so I have no idea if this is truth or urban legend. 

                      Also in Indiana regardless of how you claim your prize...Trust...LLC or whatever...you must provide the Lottery with the name and social security number of the actual person who is claiming the prize.  This is so they can make sure they deduct any outstanding obligations.

                      NOTE: In Indiana there is a disclaimer that you MUST meet with the Hoosier Lottery Public Relations people and participate in interviews with them and the media.  You must also grant them permission to use your name, image and any comments.  I'm not sure how this applies to a Trust but the disclaimer on the tickets say you must do this and the IC Codes state the Executive Director has complete and sole discretionary authority to release your name and image.

                      In addition the Executive director of the Hoosier Lottery has the power to withhold a prize if there is a question about the winner's true identity! 

                      NOTE: There have been 2 people in Indiana that have claimed lottery jackpots as Revocable Living Trusts and the Hoosier Lottery has not released the identity or any personal information on the winners that I am aware of. 

                      2. If you win a large prize other than the jackpot (such as a 5 number Powerball prize) then after all of this is completed they issue you a check on the spot.

                      If you win the jackpot and elect to take the annuity then after all the security procedures are completed you get a check for the first annuity payment on the spot. 

                      If you will the jackpot and elect to take the cash value then you receive a wire transfer after all the prize money is collected from all other states.  In other words they do not give you a check and the information I have suggests they do not wire the money into different accounts.  One wire transfer to one financial institution.  It's up to you to disprse it.

                      NOTE: I found some information on the Powerball website that says it takes 2 weeks to collect the jackpot prize money from all the states.  The information suggests that they began collecting the prize money as soon as they know there's a winner.  If you elect to take the cash option and you wait 2 weeks to collect your prize the information says you will receive your jackpot prize 24 hours after claiming it.  i.e. The next (business?) day.

                      3. By law the Hoosier Lottery is required to withhold 25% for Federal Income tax.  The previous posters are correct in that your ultimate Federal tax liability will be 35%.  Regardless of your personal tax status the Federal tax liability on that much money is 35%.   My research indicates that no matter how you claim your prize (trust, LLC etc. there are very few ways to get around this.  You would be well advised to consult a CPA who is also a tax attorney for precise information.  But I can't really see a way around this.  By the way...for those of you wo think you can reduce the tax burden by ginving money to charity I feel compelled to remind that whether you give it away or pat it to the Federal Government...it's still gone!)

                      By law the Hoosier Lottery is also required to withhold 3.4% Indiana Income Tax and also any applicable county or municipal taxes.  EVEN if you are an out of state resident they will withhold the Indiana State Income Tax and maybe the county or municipal tax where you purchased the ticket as well.  Language on the Hoosier Lottery website says you may be eligable for a refund of that money if you are an out of state resident.

                      4. In Indiana it appears they will pay multiple winners.  So if 2 people want to split the jackpot I believe they can.  This is the best for each person with regard to tax liability.  Otherwise I would be very careful about giving money to relatives.  The Federal Government has Gift Tax statues and the tax liability is stiff for money given away.  I forgot the current limit but you can only give away something like $10,000 per receipient in you lifetime before you incure a huge tax liability...something like 50% or more.  (Sorry I don't have the actual information at my fingertips as it's been a while since I looked it up.  But you can find it easily enough by doing a search or going to the IRS website.)

                      I hope this helps.

                      Jim 

                      great explanation

                        MissNYC's avatar - diva
                        Thread Starter
                        Westchester, New York
                        United States
                        Member #49345
                        January 27, 2007
                        168 Posts
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                        Posted: August 7, 2007, 7:00 pm - IP Logged

                        First the disclaimer...I'm not an attorney.  You would be well advised to consult one instead of taking what I have to say as gospel.

                        Second...I live in Indiana so the information I present is relevant to citizens of Indiana and out of state residents who win money on the Hoosier Lottery.  It may or may not be applicable to your state.

                        Here's what my research has uncovered:

                        1. When you go to Lottery Headquarters with your winning ticket to claim your prize there will be a validation process which includes (1) validating the actual ticket to make sure it's not a forgery.  (2) A security procedure which includes a questionaire that among other things asks you relevant questions such as where did you buy the ticket...when did you buy the ticket...how many tickets did you buy etc.  (3) An IRS tax form will be provided and you must fill it out.  If you are an individual you must provide your Social Security number...if you claim as a corporation you must provide an EIN number and I'm not sure what you have to provide as a trust.  (4) A search of state records will be done to see if you have any outstanding obligations such as Tax Liens...child support and as far as I can tell even civil judgments.  (Although the language in the IC codes isn't clear to me I think civil judgments do apply.)  (5) I have also been told that they do a criminal background check to see if you have any outstaning warrants.  This is not in the IC codes so I have no idea if this is truth or urban legend. 

                        Also in Indiana regardless of how you claim your prize...Trust...LLC or whatever...you must provide the Lottery with the name and social security number of the actual person who is claiming the prize.  This is so they can make sure they deduct any outstanding obligations.

                        NOTE: In Indiana there is a disclaimer that you MUST meet with the Hoosier Lottery Public Relations people and participate in interviews with them and the media.  You must also grant them permission to use your name, image and any comments.  I'm not sure how this applies to a Trust but the disclaimer on the tickets say you must do this and the IC Codes state the Executive Director has complete and sole discretionary authority to release your name and image.

                        In addition the Executive director of the Hoosier Lottery has the power to withhold a prize if there is a question about the winner's true identity! 

                        NOTE: There have been 2 people in Indiana that have claimed lottery jackpots as Revocable Living Trusts and the Hoosier Lottery has not released the identity or any personal information on the winners that I am aware of. 

                        2. If you win a large prize other than the jackpot (such as a 5 number Powerball prize) then after all of this is completed they issue you a check on the spot.

                        If you win the jackpot and elect to take the annuity then after all the security procedures are completed you get a check for the first annuity payment on the spot. 

                        If you will the jackpot and elect to take the cash value then you receive a wire transfer after all the prize money is collected from all other states.  In other words they do not give you a check and the information I have suggests they do not wire the money into different accounts.  One wire transfer to one financial institution.  It's up to you to disprse it.

                        NOTE: I found some information on the Powerball website that says it takes 2 weeks to collect the jackpot prize money from all the states.  The information suggests that they began collecting the prize money as soon as they know there's a winner.  If you elect to take the cash option and you wait 2 weeks to collect your prize the information says you will receive your jackpot prize 24 hours after claiming it.  i.e. The next (business?) day.

                        3. By law the Hoosier Lottery is required to withhold 25% for Federal Income tax.  The previous posters are correct in that your ultimate Federal tax liability will be 35%.  Regardless of your personal tax status the Federal tax liability on that much money is 35%.   My research indicates that no matter how you claim your prize (trust, LLC etc. there are very few ways to get around this.  You would be well advised to consult a CPA who is also a tax attorney for precise information.  But I can't really see a way around this.  By the way...for those of you wo think you can reduce the tax burden by ginving money to charity I feel compelled to remind that whether you give it away or pat it to the Federal Government...it's still gone!)

                        By law the Hoosier Lottery is also required to withhold 3.4% Indiana Income Tax and also any applicable county or municipal taxes.  EVEN if you are an out of state resident they will withhold the Indiana State Income Tax and maybe the county or municipal tax where you purchased the ticket as well.  Language on the Hoosier Lottery website says you may be eligable for a refund of that money if you are an out of state resident.

                        4. In Indiana it appears they will pay multiple winners.  So if 2 people want to split the jackpot I believe they can.  This is the best for each person with regard to tax liability.  Otherwise I would be very careful about giving money to relatives.  The Federal Government has Gift Tax statues and the tax liability is stiff for money given away.  I forgot the current limit but you can only give away something like $10,000 per receipient in you lifetime before you incure a huge tax liability...something like 50% or more.  (Sorry I don't have the actual information at my fingertips as it's been a while since I looked it up.  But you can find it easily enough by doing a search or going to the IRS website.)

                        I hope this helps.

                        Jim 

                        Wow what a great answer!

                        "If you just keep believing, that dream that you wish will come true"

                        Bed

                         


                          United States
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                          June 22, 2005
                          5582 Posts
                          Offline
                          Posted: August 7, 2007, 7:09 pm - IP Logged

                          First the disclaimer...I'm not an attorney.  You would be well advised to consult one instead of taking what I have to say as gospel.

                          Second...I live in Indiana so the information I present is relevant to citizens of Indiana and out of state residents who win money on the Hoosier Lottery.  It may or may not be applicable to your state.

                          Here's what my research has uncovered:

                          1. When you go to Lottery Headquarters with your winning ticket to claim your prize there will be a validation process which includes (1) validating the actual ticket to make sure it's not a forgery.  (2) A security procedure which includes a questionaire that among other things asks you relevant questions such as where did you buy the ticket...when did you buy the ticket...how many tickets did you buy etc.  (3) An IRS tax form will be provided and you must fill it out.  If you are an individual you must provide your Social Security number...if you claim as a corporation you must provide an EIN number and I'm not sure what you have to provide as a trust.  (4) A search of state records will be done to see if you have any outstanding obligations such as Tax Liens...child support and as far as I can tell even civil judgments.  (Although the language in the IC codes isn't clear to me I think civil judgments do apply.)  (5) I have also been told that they do a criminal background check to see if you have any outstaning warrants.  This is not in the IC codes so I have no idea if this is truth or urban legend. 

                          Also in Indiana regardless of how you claim your prize...Trust...LLC or whatever...you must provide the Lottery with the name and social security number of the actual person who is claiming the prize.  This is so they can make sure they deduct any outstanding obligations.

                          NOTE: In Indiana there is a disclaimer that you MUST meet with the Hoosier Lottery Public Relations people and participate in interviews with them and the media.  You must also grant them permission to use your name, image and any comments.  I'm not sure how this applies to a Trust but the disclaimer on the tickets say you must do this and the IC Codes state the Executive Director has complete and sole discretionary authority to release your name and image.

                          In addition the Executive director of the Hoosier Lottery has the power to withhold a prize if there is a question about the winner's true identity! 

                          NOTE: There have been 2 people in Indiana that have claimed lottery jackpots as Revocable Living Trusts and the Hoosier Lottery has not released the identity or any personal information on the winners that I am aware of. 

                          2. If you win a large prize other than the jackpot (such as a 5 number Powerball prize) then after all of this is completed they issue you a check on the spot.

                          If you win the jackpot and elect to take the annuity then after all the security procedures are completed you get a check for the first annuity payment on the spot. 

                          If you will the jackpot and elect to take the cash value then you receive a wire transfer after all the prize money is collected from all other states.  In other words they do not give you a check and the information I have suggests they do not wire the money into different accounts.  One wire transfer to one financial institution.  It's up to you to disprse it.

                          NOTE: I found some information on the Powerball website that says it takes 2 weeks to collect the jackpot prize money from all the states.  The information suggests that they began collecting the prize money as soon as they know there's a winner.  If you elect to take the cash option and you wait 2 weeks to collect your prize the information says you will receive your jackpot prize 24 hours after claiming it.  i.e. The next (business?) day.

                          3. By law the Hoosier Lottery is required to withhold 25% for Federal Income tax.  The previous posters are correct in that your ultimate Federal tax liability will be 35%.  Regardless of your personal tax status the Federal tax liability on that much money is 35%.   My research indicates that no matter how you claim your prize (trust, LLC etc. there are very few ways to get around this.  You would be well advised to consult a CPA who is also a tax attorney for precise information.  But I can't really see a way around this.  By the way...for those of you wo think you can reduce the tax burden by ginving money to charity I feel compelled to remind that whether you give it away or pat it to the Federal Government...it's still gone!)

                          By law the Hoosier Lottery is also required to withhold 3.4% Indiana Income Tax and also any applicable county or municipal taxes.  EVEN if you are an out of state resident they will withhold the Indiana State Income Tax and maybe the county or municipal tax where you purchased the ticket as well.  Language on the Hoosier Lottery website says you may be eligable for a refund of that money if you are an out of state resident.

                          4. In Indiana it appears they will pay multiple winners.  So if 2 people want to split the jackpot I believe they can.  This is the best for each person with regard to tax liability.  Otherwise I would be very careful about giving money to relatives.  The Federal Government has Gift Tax statues and the tax liability is stiff for money given away.  I forgot the current limit but you can only give away something like $10,000 per receipient in you lifetime before you incure a huge tax liability...something like 50% or more.  (Sorry I don't have the actual information at my fingertips as it's been a while since I looked it up.  But you can find it easily enough by doing a search or going to the IRS website.)

                          I hope this helps.

                          Jim 

                          First the disclaimer...I'm not an attorney. 

                           

                          You had me fooled !...lol

                            AuntiePat's avatar - animaniacs10
                            Just outside of Cleveland, OH
                            United States
                            Member #54079
                            August 3, 2007
                            106 Posts
                            Offline
                            Posted: August 12, 2007, 10:23 am - IP Logged

                            If you google Distribution of Lottery Winnings or something similar to that (the day I was doing this I was killiing time before leaving to go to the doc's and my mind was elsewhere so it might have been some search parameter similar but not identical to the one I stated), you will come across a copy of a form for multiple winners from the Minnesota Lottery Commission indicating on that form that you can state the percentage of the winnings to which you are entitled.  This form does not indicate that the multiple winner jackot must be distributed equally between the participants--only that each claimant is entitled to x% of the total.  I noticed that this form is really to make certain that all agencies who are entitled to a tax cut, know how to get hold of you to make certain you've paid your pound of flesh.

                              I don't know if, in my state--OH, I can do this or not but it would merit a call to the lottery commission in my hometown (which has a regional ofc) to find out under the guise of "Settling a Bet".  I've learned that many people will consent to give information over the phone if they are settling a bet or a dispute. 

                            Only problem with googling ANY lottery information is that there's so much duplication and, in general, drek (AKA s**t) that you have to wade through tp get ANY effective info--however, on second thought--that's how I discovered Lottery Post which definitely does NOT fall under the category of drek.

                              hypersoniq's avatar - 8ball
                              Pennsylvania
                              United States
                              Member #1340
                              April 6, 2003
                              2450 Posts
                              Offline
                              Posted: August 12, 2007, 1:15 pm - IP Logged

                              This is from my research about playing the powerball in Pennsylvania and also being a Pennsylvania resident...

                              (also not an attorney ;-)  )

                              you win

                              A) SIGN the ticket.

                              B) On the PA Lottery website,they list a phone number that you can call and ask what you need to do next. They WILL release your name/hometown/amount won/where you bought it... you CAN however refuse photos and the press conference/cardboard check ceremony.

                              C) Check to see if your bank participates in CDARS, this will allow FDIC insurance in a large Certificate of Deposit for up to 30,000,000, standard bank accounts allow for only 100,000 insurance. IF they do, ask them for an electronic transfer number, you will need that at lottery HQ.

                              D) IF you are preparing a revocable trust, you need to have it notarized and completed, I think you can sign the ticket as

                              "XYZ Trust... your name TRUSTEE"... they STILL release your name, but if you are creative with naming the trust you might fool some into thinking it's a group of people rather than an individual ;-)

                              you get to lottery HQ

                              E) You need proof of ID, your electronic transfer number, the winning ticket(of course),and a COPY of the trust. I don't know if you need anything else as I got that from correspondence with the PA lottery, but when you call they can tell you what else you need.

                              F) You will fill out form IRS1099G, you WILL owe more than the 25% they withhold, but you have to pay that later with a different IRS form, not sure of the number of that form.

                              G) You WILL leave that day empty-handed, so MAKE A COPY OF FRONT AND BACK OF THE TICKET!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!Before you go. (And AFTER you sign it) In Pennsylvania the "validation" process can take up to 8 weeks, so you can't just quit your job... BUT the boss might axe you when your name is announced (THIS is but one of the many issues I have with PA's policy of announcing the name before paying up). During this process, they WILL check to see if

                              ...1)You owe any back child support

                              ...2)You are required to pay back any welfare

                              ...3)You have judgement against you for any crime that would require monetary reimbursement

                              that will be deducted before you get a dime.

                              H) GIFTS... anything over 12k in one tax year will require BOTH YOU and the recipient to pay a gift tax.

                              There are a number of things above that will require at minimum an Attorney and a Tax Specialist, so be sure to consult with them before doing anything (but of course AFTER you sign the ticket... that is the important part)

                              Playing more than one ticket per game is betting against yourself.