When it comes to taxes on lottery winnings, how does New Jersey compare to other states?
One of the great inducements in New Jersey has been if you win, it’s tax free. Someone who lives in New York City or Philadelphia and plays the lottery will pay a higher tax. Delaware doesn’t tax at all. Q: What do you make of the retroactive provision? A: I’m not an attorney, but to me, it’s questionable. If I won $10 million and now it’s going to cost me $1 million in tax, it would behoove me to test the law even if I have to spend $110,000 to do it. There’s a lot at stake. It also effects winners who receive annuity payouts. Say 11 years ago, I won $50,000. Everything I received through 2008 was tax exempt, but the dollars from Jan. 1, 2009 and later are subject to the tax. Q: What advice would you give clients who win a lottery jackpot and then face the reality of paying federal and state taxes on their winnings? A: I would ask them how big a family they have, how many brothers, sisters and children who file their own tax returns. I would advise them to spread the wealth. There’s n
