If and when Sam finally wins a substantial amount of lottery dough,
For this hypothetical scenario we'll say more than $750,000.00.

Should he expect to be taxed by both his home state and the state where the winning lottery ticket was purchased?

And of course the feds.

Short answer is yes. Everyone will want a slice of it. And you will most likely have to file an out of state tax return for that year as well

Yes but in most jurisdictions you get a credit for the out of state payments so it’s really a rate discussion.

I don’t care if I had to pay both, I’d be a happy boy. More than I had. But the credit is nice.

You can not win if you do not buy a ticket. Yes everybody is going to want their slice of the pie. Including family and looooong lost family relatives that you have never heard of. .............................. drill sgt.

quote:

Originally posted by hrcjon:
Yes but in most jurisdictions you get a credit for the out of state payments so it’s really a rate discussion.

THis is correct. The state where you bought the ticket gets first crack. They will tax your winnings at their current rates. Then you will get a credit for those taxes paid against the taxes owed to your state of residence. If the state where you live has a lower rate than the state where you purchased the ticket, you won't owe additional taxes. If the rate is higher, the you will pay the difference. Ultimately, you'll end up paying taxes at the rate imposed by the state with the higher tax rate, but you won't be double taxed.

If Sam resides in Illinois is it foolish for him to purchase a ticket or three in Iowa?
Or
For $1,000,000.00,
Gross pay out ,
Sam shouldn't be the least bit concerned ?

Thank you for your respondings

quote:

You can not win if you do not buy a ticket.

The way I figure the odds of winning, buying a ticket doesn't change anything.

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If Sam resides in Illinois is it foolish for him to purchase a ticket or three in Iowa?

^^^^^^^^^^
Gov. Pritzker would say so. Illinois needs the revenue. Sam should move to Iowa where the living is better.

When is the taxable event? At the time you won the lottery, or at the time you redeemed the ticket?

Let's say an Illinois resident buys his ticket in Iowa. Since most lotteries give you up to six months to redeem, could you hold the ticket, move across the river, establish IA residency, redeem the ticket, and then just give IL the finger?

Or better yet, if you live in Bristol(VA/TN), always buy your ticket on the TN side of the line, and then move if you win.

the time you redeemed the ticket.

Since your chances of winning BIG are so slim, I wouldn’t worry about it.

However, what if you win $2 or $5? Not entirely unreasonable, but you have to return to the state to collect it. And it probably won’t be worth it. And if you travel back to that state for whatever reason, you have to remember to take the ticket. Yes, I’m speaking from experience.

quote:

Originally posted by sigcrazy7:
When is the taxable event? At the time you won the lottery, or at the time you redeemed the ticket?

Let's say an Illinois resident buys his ticket in Iowa. Since most lotteries give you up to six months to redeem, could you hold the ticket, move across the river, establish IA residency, redeem the ticket, and then just give IL the finger?

Or better yet, if you live in Bristol(VA/TN), always buy your ticket on the TN side of the line, and then move if you win.

I think you are on to something here...Seems to me receiving the winnings would trigger a taxable event: not purchasing an anonymous ticket. Move and then cash the ticket in Iowa? Move to Nevada then cash the ticket? Nevada residency requirement is easy-peasy. Reminds me of the song: "Take the Money and Run"

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Since your chances of winning BIG are so slim, I wouldn’t worry about it.

I bet that the reason bendable asked this question is, he has the winning ticket and is trying to figure out how to deal with it.

quote:

Originally posted by V-Tail:

quote:

Since your chances of winning BIG are so slim, I wouldn’t worry about it.

I bet that the reason bendable asked this question is, he has the winning ticket and is trying to figure out how to deal with it.

I don't see what is problem is then ... obviously he should just split the money with anyone that has replied to this thread. Problem solved.

quote:

Originally posted by V-Tail:
[QUOTE]I bet that the reason bendable asked this question is, he has the winning ticket and is trying to figure out how to deal with it.

That's a great sentiment, thanks.

But I got $750,000.00 gross , ( $500,000.00 net)
Covered

That's a nice ranch style house in a good neighborhood in Iowa ,a new vehicle and some bills.

Again ,keep up with good vibes