How are Lottery winnings taxed?
All Lottery prizes, regardless of the amount, are considered as income by the state and federal government. The Oregon Lottery is required to report all prizes over $600 to the Internal Revenue Service and Oregon Department of Revenue. For prizes over $5,000, the Lottery is required to withhold 25% for federal taxes, and 8% for state income taxes. The winner’s actual tax liability will depend on their overall financial situation, and when they file their taxes at the end of the year, they could owe more or less than the actual amount withheld.
